(Bloomberg) — Global stocks rose on Monday as futures hinted at a new record high on Wall Street.
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Europe's Stoxx 600 index rose 0.5%, led by banks, real estate and tech stocks. Futures contracts for the Nasdaq 100 Index rose 0.6%, and futures contracts for the S&P 500 Index rose 0.3%. It comes after the last of the three major U.S. stock benchmarks hit a record closing price.
Stock markets ignore a rise in bond yields in January on optimism about the resilience of the US economy, confidence that central banks will start cutting interest rates later this year, and signs that the artificial intelligence boom is here to stay. are doing. Meanwhile, the performance of the majority of S&P 500 companies provided a positive surprise in recent earnings season.
“At the same time that we're talking about rate cuts, we're moving into an environment where we think the economic slowdown is coming to a soft landing,” said Jun Bei Liu, a fund manager at Tribeca Investment Partners in Sydney. “When you put all this together, it looks pretty positive for the stock market.”
In pre-market trading in the US, tech stocks rose, led by Western Digital and PayPal Holdings, ahead of Netflix Inc.'s earnings report this week. The so-called “Magnificent Seven” companies, Tesla and Intel, are expected to have a combined profit growth of about 46%, according to data compiled by Bloomberg Intelligence.
The European market has underperformed its high-tech rivals in the United States, and has been in the red for the year so far. Monday's main stock movements were led by M&A, with Swedish online gambling company Kindred Group tipped off by La Française des Jeux SA's offer to acquire it for 27.95 billion krona ($2.7 billion). The stock soared 19% as a result. Worldline SA rose as much as 6% after Credit Agricole acquired a 7% stake in the payments company.
Investors' attention will be on meetings of the Bank of Japan on Tuesday and the European Central Bank on Thursday, with both institutions likely to leave policy settings unchanged. Thursday's fourth-quarter U.S. GDP data could provide a clue as to when the Federal Reserve will make its first interest rate cut.
The 10-year Treasury yield was flat at about 4.1%, more than 20 basis points above its level at the end of 2023, as Federal Reserve officials push back on expectations for early interest rate cuts. Still, Friday's University of Michigan survey showing a mix of high consumer confidence and low inflation expectations gives the bond market reason for optimism, with many analysts predicting a We expect yields to fall in the coming weeks.
Meanwhile, in European bond markets, Italy's yield premium over Germany, a key measure of intraregional risk, rose in 2022 as investors scrambled to secure some of the region's highest interest rates before the ECB embarked on monetary easing. This is the lowest level since April.
Official borrowing costs for 10-year bonds fell by 6 basis points to 3.82% on Monday, with the spread over the German Bund benchmark narrowing to 152 basis points as of 8:14 a.m. in London, the lowest in late October. This is down from over 200 basis points.
Earlier, Chinese stocks traded in Hong Kong fell 2.4%, near 2005 lows, as banks kept lending rates unchanged after the People's Bank of China refrained from cutting borrowing costs last week. The stock index also fell. Meanwhile, Japanese stocks have risen more than 9% since the beginning of the year.
Crude oil falls as OPEC member Libya restarts production at its biggest oil field, boosting global supplies and helping to negate fears that tensions in Red Sea shipping could disrupt energy supplies did.
This week's main events:
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US Conference Board Leading Index, Monday
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Bank of Japan interest rate decision, Tuesday
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Eurozone consumer confidence, Tuesday
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Netflix Inc. plans to report earnings.Streaming services set for strong performance heading into 2023 on Tuesday
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Japan trade, Wednesday
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Eurozone S&P Global Services and Manufacturing PMI, Wednesday
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UK S&P Global/CIPS Manufacturing PMI, Wednesday
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US S&P Global Services and Manufacturing PMI, Wednesday
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Tesla Inc. and International Business Machines Inc. (IBM) plan to report financial results on Wednesday.
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European Central Bank 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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LVMH, Northrop Grumman and SK Hynix report financial results on Thursday
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Japan Tokyo CPI, Friday
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Bank of Japan issues minutes of policy meeting on Friday
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US Personal Income and Expenditures, Friday
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Holiday rush begins in China ahead of next month's Lunar New Year Friday
The main movements in the market are:
stock
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As of 9:58 a.m. London time, the Stoxx European 600 was up 0.5%.
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S&P 500 futures rose 0.3%
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Nasdaq 100 futures rose 0.6%
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Dow Jones Industrial Average futures rose 0.2%.
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MSCI Asia Pacific Index rose 0.1%
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MSCI Emerging Markets Index falls 0.6%
currency
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Bloomberg Dollar Spot Index little changed
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The euro remained unchanged at $1.0898.
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The Japanese yen remains unchanged at 1 dollar = 148.12 yen.
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The offshore yuan was almost unchanged at 7.2029 yuan to the dollar.
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The British pound was almost unchanged at $1.2705.
cryptocurrency
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Bitcoin fell 2.6% to $40,693.25.
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Ether fell 3.4% to $2,388.49.
bond
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The 10-year government bond yield was almost unchanged at 4.12%.
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Germany's 10-year bond yield fell 4 basis points to 2.30%.
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UK 10-year bond yields fell 3 basis points to 3.90%.
merchandise
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Brent crude oil remains largely unchanged
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Spot gold fell 0.4% to $2,021.88 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Garfield Reynolds, Nicholas Reynolds, and Jason Scott.
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