Stocks, U.S. Futures Rise With Earnings in Focus: Markets Wrap

(Bloomberg) — U.S. equity futures rose along with stocks in Europe on Tuesday as corporate earnings helped boost sentiment amid lingering concerns about inflation and growth.

U.S. futures advanced, with Nasdaq 100 contracts outperforming. The tech-heavy gauge led U.S. gains overnight amid a Tesla Inc. rally to a $1 trillion market value. Facebook Inc. rose in pre-market trading on strong user growth and a pledge to buy back as much as $50 billion more in stock. Twitter Inc., Alphabet Inc. and Microsoft Inc. are reporting after the market close on Tuesday.

The Stoxx Europe 600 index rose more than 0.5%, edging close to a the record high reached in September. Reckitt Benckiser Group Plc gained more than 5% after the maker of Strepsils throat lozenges raised its sales forecast. Swiss lender UBS Group AG climbed after posting a surprise jump in profit, while Novartis AG advanced on news it may spin off its generic-drug unit.

The 10-year U.S. Treasury yield and the dollar were steady. The debate over price pressures continues: former Treasury Secretary Lawrence Summers said officials are unlikely to deal with “inflation reality” successfully until it’s fully recognized.

Earnings season is helping to counter concerns that elevated inflation and tightening monetary policy will slow the recovery from the pandemic. Some 81% of S&P 500 members have reported better-than-expected results so far.

Equity markets are “continuing their recovery and we expect this process to continue past big-tech earnings” and this week’s European Central Bank meeting, where policy makers may flag the end to their pandemic bond-buying program, Sebastien Galy, senior macro strategist at Nordea Investment Funds, wrote in a note.

In China, Modern Land China Co. became the latest builder to miss a payment on a dollar bond, in a further sign of stress in the nation’s real estate sector. Defaults from Chinese borrowers on offshore bonds have jumped to a record.

Japanese equities outperformed while China and Hong Kong slipped. Traders digested incremental progress in U.S.-China economic and trade talks in the shape of a second call in about four months between Vice Premier Liu He and Treasury Secretary Janet Yellen. The yen fell amid easing demand for havens.

WTI crude oil slipped toward $83 a barrel as investors weighed the outlook for U.S. stockpiles and prospects for talks that may eventually help to revive an Iranian nuclear accord, allowing a pickup in crude exports.

Gold held above $1,800 an ounce and Bitcoin hovered around $62,500.

Here are some events to watch this week:

• Earnings: Amazon, Apple, Microsoft, Twitter, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group
• Australia CPI, Wednesday
• U.S. wholesale inventories, U.S. durable goods, Wednesday
• Bank of Japan monetary policy decision, briefing, Thursday
• ECB rates decision, President Christine Lagarde briefing, Thursday
• U.S. GDP, initial jobless claims, Thursday
• G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

• Futures on the S&P 500 rose 0.4% as of 6:05 a.m. New York time
• Futures on the Nasdaq 100 rose 0.7%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The Stoxx Europe 600 rose 0.6%
• The MSCI World index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1617
• The British pound rose 0.2% to $1.3798
• The Japanese yen fell 0.3% to 114.03 per dollar

Bonds

• The yield on 10-year Treasuries declined one basis point to 1.62%
• Germany’s 10-year yield declined two basis points to -0.13%
• Britain’s 10-year yield declined two basis points to 1.12%

Commodities

• West Texas Intermediate crude fell 0.5% to $83.31 a barrel
• Gold futures fell 0.1% to $1,804.80 an ounce