Asian stocks climbed on Monday together with U.S. and European equity futures ahead of the start of an earnings season that will provide more clues on how companies are coping with the pandemic. The dollar slipped.
Japanese shares outperformed, rising more than 2%. Gains were more modest in Hong Kong, South Korea and Australia, while Chinese shares climbed after last week’s surge. S&P 500 futures edged up as investors await banks to report results. Oil retreated, and gold rose above $1,800 an ounce. Treasury yields ticked lower.
With global equities trading near their highest since February, investors are waiting to hear what companies have to say about the profit outlook. New coronavirus outbreaks in some parts of the world are causing partial lockdown restrictions to be reimposed, fueling doubts about the likely pace of the global recovery.
“We think earnings are likely to recover in the second half of the year and excess liquidity will continue to support risk assets,” said Julie Fox at UBS Private Wealth Management. “We see further potential in global equities and think there’s some upside in segments of the market that have underperformed during the crisis.”
Florida on Sunday posted the biggest one-day rise in cases since the coronavirus pandemic began in the U.S., reporting 15,300 new infections. South Carolina and Texas set new marks a day earlier, while New York’s rate remained steady.
“We do think that the global economy is now entering a multi-year recovery but there are going to be wobbles along the way,” Mary Nicola, a portfolio manager at PineBridge Investments, said on Bloomberg TV. “Governments and the central banks have deployed a lot of measures and will keep doing so until we get to the other side of this.”
Here are some key events coming up:
- JPMorgan, Bank of America, Wells Fargo, Goldman Sachs, BNY Mellon and Citigroup start the U.S. earnings season.
- Wednesday brings the Bank of Japan’s policy decision and a Governor Haruhiko Kuroda briefing.
- The EIA crude oil inventory report is due Wednesday.
- China releases second-quarter GDP on Thursday as well as key economic indicators for June.
- The European Central Bank meets to set monetary policy on Thursday, with President Christine Lagarde holding a virtual press conference afterward.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index climbed 0.5% as of 6:15 a.m. in London. The gauge rose 1.1% on Friday.
- Japan’s Topix index advanced 2.3%.
- Hong Kong’s Hang Seng rose 1.2%.
- The Shanghai Composite added 1.8%.
- South Korea’s Kospi added 1.7%.
- Euro Stoxx 50 futures rose 1.3%.
Currencies
- The yen was at 106.89 per dollar, little changed.
- The offshore yuan traded at 6.9994 per dollar, 0.2% higher.
- The euro bought $1.1329, up 0.3%.
- The Bloomberg Dollar Spot Index fell 0.2%.
Bonds
- The yield on 10-year Treasuries slid to 0.63%.
- Australia’s 10-year yield rose three basis points to 0.89%.
Commodities
- West Texas Intermediate crude oil fell 0.8% to $40.22 a barrel.
- Gold was at $1,805.40 an ounce, up 0.4%.
Source: Bloomberg
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