Stock Futures Climb on Earnings; Oil Extends Gains: Markets Wrap

(Bloomberg) -- U.S. and European futures climbed along with Asian stocks at the close of the month amid optimism from corporate results and signs of progress in treating the coronavirus.

Oil futures continued to rebound after the early-week tumble. Japanese and Chinese equities rose over 1%, and Australian ones jumped 2%-plus. Hong Kong and South Korea were shut for a holiday. Nasdaq futures advanced after results from Microsoft Corp., Facebook Inc. and Tesla Inc. lifted sentiment. Treasuries advanced, while the dollar held losses from earlier this week.

China’s currency climbed against the dollar after the central bank’s daily onshore fixing for the yuan was slightly stronger than expected, coming ahead of a long holiday weekend.

The S&P 500 Index on Wednesday gained more than 2.5% to touch a seven-week high, helped in part by Gilead Sciences Inc. saying its experimental drug helped Covid-19 patients recover faster. The U.S. government’s top infectious-disease expert, Anthony Fauci, said the early results from the Gilead drug trial offered “quite good news,” providing some optimism that scientists are making progress in therapies to combat the pandemic.

“What’s really driving markets at this stage is any positive news of potential treatments and vaccines, because ultimately that is a game changer,” said Seema Shah, a global investment strategist for Principal Global Investors. “That’s what’s going to be pushing markets, plus anything with regards to the lockdown being lifted earlier.”

Global stocks are up 11% this month as investors weigh plans by countries around the world to restart activity. The latest data from China showed a slight dip in manufacturing in April, while a reading on the services sector topped estimates. In Japan, industrial production slumped to its lowest since 2013 in March.

Meantime, the U.S. economy shrank at a 4.8% annualized pace last quarter, the most since 2008. Federal Reserve Chairman Jerome Powell voiced concern the coronavirus crisis could leave permanent scars on the economy and said policy makers of all stripes needed to do more to limit the damage. The European Central Bank sets policy Thursday, with Bloomberg Economics expecting the pandemic bond-buying program to be increased.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index rose 0.3% as of 7:07 a.m. in London. The gauge increased 2.7% on Wednesday.
• Euro Stoxx 50 futures rose 0.6%.
• Japan’s Topix index added 1%.
• MSCI Asia Pacific Index climbed 1.3%.

Currencies

• The yen gained 0.2% to 106.47 per dollar.
• The offshore yuan traded at 7.0558 per dollar, up 0.3%.
• The euro bought $1.0854, down 0.2%.

Bonds

• The yield on 10-year Treasuries dipped about three basis points to 0.60%.
• Australia’s 10-year yield dropped to 0.89%.

Commodities

• West Texas Intermediate crude gained 12% to $16.85 a barrel.
• Gold edged up to $1,718 an ounce.

©2020 Bloomberg L.P.