(Bloomberg) — European shares rose, while U.S. index futures and Asian stocks fell, as investors hunted for pockets of value amid concerns about central banks, disappointing earnings and further consolidation of power in China.
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The dollar gained ahead of data on the Federal Reserve’s discretionary inflation measure. The Stoxx Europe 600 index rose for a second day. S&P 500 and Nasdaq 100 contracts each fell at least 0.2%. Chinese technology stocks led the sell-off in Asia amid signs price wars and cash burns are undermining profits. The yen fell after the Bank of Japan’s top nominee signaled a continuation of loose monetary policy.
Traders grapple with a complex investment landscape as they navigate an era of tight monetary policy. Risks surrounding central banks’ continued fight against inflation, growth and corporate performance are compounded by growing geopolitical tensions from Russia to North Korea and regulatory restrictions in China.
“Elevating tensions are certainly increasing the safe haven for US Treasuries and interfering with hawkish Fed pricing,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
Europe’s Stoxx 600 gauge rose for a second day, nearly erasing its weekly losses, as investors continued to prioritize value stocks over the U.S. or China, where growth stocks dominate. Energy and construction companies were the best-performing industry groups in the benchmark index.
A volume of Hong Kong-listed Chinese tech stocks fell 3.3%. NetEase Inc. Profit fell due to a miss, while Alibaba Group Holding Ltd fell as analysts were wary of its sales growth prospects. Meanwhile, Chinese President Xi Jinping is set to further bring financial system decision-making under his control with the revival of a powerful board.
The dollar advanced for the third time in four days ahead of Friday’s release of the consumer spending index – the central bank’s preferred price gauge – which is expected to accelerate amid strong income and spending growth. Treasuries were mixed.
German yields fell more than expected as gross domestic product in Europe’s biggest economy shrank 0.4% in the fourth quarter.
Among commodities, oil extended early Thursday as it snapped its longest losing streak since December amid signs of strength in commodity currencies and risk appetite.
Bitcoin was on pace for its second monthly advance, outpacing falling stocks and other riskier assets amid renewed concerns about rising interest rates.
Highlights of this week:
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US PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday
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Russia’s invasion of Ukraine marked one year on Friday
Some key movements in the markets:
Shares
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The Stoxx Europe 600 was up 0.4% as of 8:43 a.m. London time.
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S&P 500 futures fell 0.2%
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Nasdaq 100 futures fell 0.5%
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Futures for the Dow Jones industrial average fell 0.1%
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The MSCI Asia Pacific index fell 0.6%
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The MSCI emerging market index fell 1.3%
Coins
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro was little changed at $1.0594
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The Japanese yen fell 0.1% to 134.88 per dollar
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The offshore yuan fell 0.5% to 6.9527 per dollar
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The British pound was up 0.2% at $1.2039
Cryptocurrencies
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Bitcoin rose 0.1% to $23,905
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Ether rose 0.5% to $1,653.78
Bonds
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The yield on 10-year Treasuries was little changed at 3.88%.
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Germany’s 10-year yield fell three basis points to 2.45%
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Britain’s 10-year yield fell three basis points to 3.56%
materials
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Brent crude was up 1.2% at $83.22 a barrel
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Spot gold rose 0.2% to $1,825.35 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Tasia Sipahuder, Rob Verdank, Richard Henderson and Matthew Burgess.
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