U.S. Futures, Stocks Rise as Growth Angst Eases: Markets Wrap

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(Bloomberg) — U.S. stock-index futures gained as equity markets stabilized after Monday’s rout, with investors weighing corporate earnings against the uncertain outlook for global growth. Treasury yields edged lower and the dollar was steady.

Contracts on the S&P 500 and Nasdaq 100 signaled a firmer open for U.S. stocks Tuesday. International Business Machines Corp. rose in pre-market trading after reporting its biggest increase in quarterly revenue in three years. The 10-year Treasury yield held below 1.2% after hitting the lowest level since February as traders pared bets on Federal Reserve tightening.

The Stoxx Europe 600 index snapped a four-day losing streak as traders looked for opportunities to buy the dip after the worst slump since October. UBS Group AG jumped more than 4% after reporting earnings that beat analysts’ estimates, while Volvo Group declined after missing expectations. Bonds in Europe advanced.

Traders are trying to gauge how long a bout of growth angst and volatility driven by outbreaks of the delta strain will last, after becoming accustomed to retail investors buying dips in stocks. Meanwhile, bond investors are wagering that the Federal Reserve will continue supporting the economic revival with ultra-low rates well into next year as officials grapple with rising infections from Sydney and Jakarta to London.

“Given that there is little doubt that central banks will do all they can the prevent a significant tightening of financial conditions, meaning there is still a lot of liquidity ready to buy the dip, we think that market valuations are starting to be appealing from a medium-term perspective,” Xavier Chapard, a strategist at Credit Agricole CIB, wrote in a client note. Still, “we are not sure that markets have already fully integrated the risks caused by the new epidemic developments,” he added.

Crude oil hovered between small gains and losses, while Bitcoin fell below the closely watched $30,000 level.

Elsewhere, Asian stocks fell, with cyclicals like energy and industrial stocks among the weakest performers in the Asian retreat. Emerging-market equities slid for a third straight session.

For more market commentary, follow the MLIV blog.

Some key events to watch this week:

European Central Bank rate decision ThursdayBank Indonesia rate decision ThursdayU.S. existing home sales ThursdayThe Tokyo Summer Olympics begin Friday

Here are some of the main market moves:

Stocks

Futures on the S&P 500 rose 0.6% as of 8:08 a.m. New York timeFutures on the Nasdaq 100 climbed 0.4%Futures on the Dow Jones Industrial Average gained 0.7%The Stoxx Europe 600 rose 0.5%The MSCI World index fell 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro fell 0.2% to $1.1776The British pound fell 0.5% to $1.3608The Japanese yen fell 0.1% to 109.61 per dollar

Bonds

The yield on 10-year Treasuries was little changed at 1.18%Germany’s 10-year yield declined three basis points to -0.41%Britain’s 10-year yield declined three basis points to 0.53%

Commodities

West Texas Intermediate crude rose 0.4% to $66.66 a barrelGold futures rose 0.6% to $1,819.30 an ounce

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