(Bloomberg) – Global stocks took a breather after a recent rally on Thursday as investors processed the latest earnings news and looked forward to the European Central Bank meeting and U.S. economic growth data.
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Europe's Stoxx 600 index fell, while the blue-chip Euro Stoxx 50 index was flat after soaring to a 23-year high on Wednesday. Chipmaker STMicroelectronics NV fell as much as 6% after it reported softening customer orders and expected weaker earnings going forward. Stockholm-based SEB AB reported weaker-than-expected profits, while Finland's Nokia Oyj expects a tough market environment.
Prior to this, South Korea's SK Hynix, the world's No. 1 company, fell the most in three weeks following the results of two memory chip makers, and automaker Hyundai Motor also fell below expectations.
The report follows disappointment in Tesla, which fell 6% in after-hours trading on Wednesday after the electric car maker missed profit expectations this year and showed slower growth. Contracts on the Nasdaq 100 index traded flat after the index rose for his fifth straight day.
Investors are also keen to see when the central bank will cut interest rates, with policymakers opposing the possibility of swift and early easing. The ECB is expected to keep interest rates on hold until later in the day, but its statement and post-board press conference will be analyzed for clues about the way forward.
Similarly, US statistics show that the economy is expected to expand at an annual rate of 2% in the fourth quarter. A number of other statistics are also expected to be released, including inventory, new home sales and weekly jobless claims, which will provide an overview of the economy before the Federal Reserve's meeting in late January.
A key focus for risk assets is the U.S. Treasury market, where long-term yields are rising. The 30-year Treasury yield rose to its highest level this year the previous day, but fell by about 2 basis points on Thursday. The rise was due to weak government bond auctions and expectations for the government's heavy borrowing schedule.
The 10-year Treasury yield is currently hovering around 4.16%, close to where it was before the Fed's dovish policy shift sparked a bond rally.
Chinese and Hong Kong stocks continued to rise in the morning, offsetting plans by the People's Bank of China to cut banks' reserve requirements next month.
Questions persist about the effectiveness of such monetary stimulus, with analysts pointing out that RRR cuts have not boosted Chinese stocks in the past. But while the pledge provided some support for industrial metal prices, oil prices are now trading near a one-month high.
This week's main events:
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Eurozone ECB interest rate decision Thursday
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Germany IFO Business Environment Thursday
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US GDP, new unemployment claims, durable goods, wholesale inventories, new home sales, Thursday
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Japan Tokyo CPI, Friday
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US Personal Income and Expenditures, Friday
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Bank of Japan issues minutes of policy meeting on Friday
The main movements in the market are:
stock
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As of 8:31 a.m. London time, the Stoxx European 600 was down 0.2%.
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S&P500 futures little changed
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Nasdaq 100 futures little changed
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Dow Jones Industrial Average futures rose 0.2%.
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MSCI Asia Pacific Index rose 0.2%
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MSCI Emerging Markets Index rises 0.5%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0891.
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The Japanese yen fell 0.2% to 147.78 yen to the dollar.
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The offshore yuan fell 0.2% to 7.1748 yuan to the dollar.
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The British pound was almost unchanged at $1.2724.
cryptocurrency
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Bitcoin rose 0.7% to $40,057.87
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Ether rose 0.3% to $2,222.7
bond
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The 10-year government bond yield was almost unchanged at 4.17%.
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Germany's 10-year bond yield rose 1 basis point to 2.36%.
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The UK 10-year bond yield rose 2 basis points to 4.03%.
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Ruth Carson and Tassia Sipahutar.
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