(Bloomberg) – Equities rose on positive earnings reports in Europe and optimism about the interest rate outlook. US futures fell after a late rally on Wall Street.
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The Stoxx Europe 600 Index climbed, with oil and gas company Equinor ASA and lender ABN Amro NV reporting earnings down. US futures were lower after a Nasdaq 100-led rally on Tuesday after Federal Reserve Chair Jerome Powell missed an opportunity to dampen investor optimism. Chipotle Mexican Grill Inc. fell in late trade after profitability and a key indicator of sales missed estimates.
A benchmark for Asian equities rose, with gains in Australia and South Korea offsetting underperformance by Chinese equities. Treasury yields and a measure of the dollar ticked lower.
Risk sentiment was boosted after Powell stressed that disinflation has begun. While he reiterated that more hikes are likely to be needed if the job market remains strong, his remark reassured traders who had expected a more aggressive backlash against easing financial conditions after Friday’s record payroll report.
“Another aggressive speech goes unheard,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said of Powell’s comments. “Investors focused on the fact that he seemed as hawkish as ever, that he didn’t promise a 50 basis point hike at the next meeting, and that he said the Fed won’t actively shrink its balance sheet for at least a couple of years.”
Read: Powell says more rate hikes are needed and bonds beware
Shares of Adani Enterprises rose for a second day after short seller Hindenburg Research’s damning report released two weeks ago prompted a defeat. Hedge fund and distressed debt investors have started buying Adani corporate bonds. Ratings firm Moody’s said in a report that Indian banks’ exposure to the Adani group is not large enough to affect its credit quality.
The story goes on
Elsewhere in markets, oil extended gains after its biggest one-day move since November, helped by a rebound in demand from China.
Key Events:
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US Wholesale Inventories, Wednesday
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New York Fed President John Williams will be interviewed at a live Wall Street Journal event on Wednesday
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US initial jobless claims, Thursday
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ECB President Christine Lagarde will attend the EU summit on Thursday
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Bank of England Governor Andrew Bailey appears before the Finance Committee on Thursday
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University of Michigan consumer sentiment, Friday
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The Fed’s Christopher Waller and Patrick Harker speak on Friday
Some of the key movements in the markets:
Shares
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The Stoxx Europe 600 was up 0.8% at 10:07 am London time
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S&P 500 futures fell 0.3%
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Nasdaq 100 futures down 0.3%
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Futures on the Dow Jones Industrial Average fell 0.2%
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MSCI Asia Pacific Index up 0.6%
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MSCI Emerging Markets Index up 0.5%
currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.2% to $1.0750
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The Japanese yen rose 0.2% to 130.78 per dollar
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The offshore yuan fell 0.1% to 6.7912 per dollar
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The British pound rose 0.4% to $1.2095
cryptocurrencies
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Bitcoin was little changed at $23,183.62
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Ether was up 0.2% to $1,670.62
Bind
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The 10-year government bond yield fell two basis points to 3.65%
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The 10-year German government bond yield rose two basis points to 2.37%
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The 10-year UK government bond yield was little changed at 3.31%.
raw materials
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Brent crude rose 1.1% to $84.60 a barrel
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Spot gold rose 0.6% to $1,884.04 an ounce
This story was created with the support of Bloomberg Automation.
–Assisted by Richard Henderson and Sagarika Jaisinghani.
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