U.S. Futures, Stocks Rise; Treasuries Resume Gains: Markets Wrap

(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.

Futures on the S&P 500 and Nasdaq 100 signaled a firmer open for U.S. stocks. The Stoxx Europe 600 index snapped a four-day losing streak as traders looked for buying opportunities 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.

The 10-year Treasury yield fell further below 1.2%, hitting the lowest level since February as traders pared bets on Federal Reserve tightening. Crude oil hovered between small gains and losses, while Bitcoin fell below the closely watched $30,000 level.

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.

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

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Some key events to watch this week:

• European Central Bank rate decision Thursday
• Bank Indonesia rate decision Thursday
• U.S. existing home sales Thursday
• The Tokyo Summer Olympics begin Friday

Here are some of the main market moves:

Stocks

• Futures on the S&P 500 rose 0.5% as of 6:34 a.m. New York time
• Futures on the Nasdaq 100 rose 0.5%
• Futures on the Dow Jones Industrial Average rose 0.6%
• The Stoxx Europe 600 rose 0.5%
• The MSCI World index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1789
• The British pound fell 0.2% to $1.3643
• The Japanese yen was little changed at 109.41 per dollar

Bonds

• The yield on 10-year Treasuries declined two basis points to 1.17%
• Germany’s 10-year yield declined three basis points to -0.42%
• Britain’s 10-year yield declined three basis points to 0.53%

Commodities

• West Texas Intermediate crude rose 0.4% to $66.67 a barrel
• Gold futures rose 0.6% to $1,819.60 an ounce

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