Stocks advance after Wall Street record: Markets wrap

(Bloomberg) — European stocks and U.S. futures rose, extending a global equity rally that pushed the S&P 500 to a record high on Friday.

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The European Stoxx 600 index rose 0.8% in early trading on Monday, with banking, real estate and technology stocks among the stocks leading the rise. Technology stocks led gains in US futures after the S&P 500 rose beyond 4,800 last week on optimism about expected interest rate cuts from the Federal Reserve and an artificial intelligence boom. Chinese stocks bucked the trend as pessimism over the country’s faltering recovery led to increased losses.

After hitting its lowest point in October 2022, the S&P 500 rose about 35% and surpassed its previous closing high of 4,796.56 on Friday. The gauge became the last of the three major US stock indexes to close at a record high.

“We are heading toward an environment where the economic slowdown looks more like a soft landing, and at the same time we are talking about interest rate cuts,” said Jun-Pei Liu, a fund manager at Tribeca Investment Partners in Sydney. “All of this together looks very positive for the stock market.”

In M&A news on Monday, Kindred Group Plc shares jumped 19% after La Francaise des Jeux SA offered to buy the Swedish company for 27.95 billion kroner ($2.7 billion) in a move that would boost Europe’s online gambling industry.

The dollar and US Treasuries were flat. Benchmark securities rose on Friday as a “Fed-friendly” poll by the University of Michigan showed a mix of high consumer confidence and lower inflation expectations.

Investor attention later this week turns to the Bank of Japan, which is overwhelmingly expected to leave its settings unchanged on Tuesday when it announces the results of its meeting. Thursday will see the release of a preliminary estimate for US fourth-quarter GDP and an interest rate decision from the European Central Bank.

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In Asian trading on Monday, the region’s main stock index erased previous gains as the Hang Seng Index fell 3% and major indices in mainland China fell. Chinese commercial lenders kept their key lending rates unchanged on Monday, in line with the central bank’s decision last week to refrain from lowering borrowing costs.

said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. In Singapore, the current low valuations of Chinese stocks are not enough to encourage investors back into the markets. “Our suspicion is that they will provide more stimulus, but the question is whether it will be large enough to appease the markets,” he said of Chinese policymakers.

Oil prices fell as OPEC member Libya resumed production at its largest field, boosting global supplies and for now outweighing concerns about tensions in the Red Sea that appear set to continue disrupting shipping.

Main events this week:

• Leading US Conference Board Index, Monday

• Bank of Japan interest rate decision, Tuesday

• Consumer confidence in the euro zone, Tuesday

• Netflix Inc. will announce its profits; The streaming service is set to announce a strong finish to 2023, Tuesday

• Japanese Trade, Wednesday

• Eurozone Purchasing Managers’ Index (PMI) for global services and manufacturing, Wednesday

• UK S&P Global/CIPS Manufacturing PMI, Wednesday

• US Services and Manufacturing Purchasing Managers’ Index (S&P), Wednesday

• Tesla Inc and International Business Machines Corp (IBM) will report earnings on Wednesday

• European Central Bank interest rate decision, Thursday

• Germany Ifo Business Climate, Thursday

• US GDP, Initial Jobless Claims, Durable Goods, Wholesale Inventories, New Home Sales, Thursday

• LVMH, Northrop Grumman Corp. and SK Hynix report earnings on Thursday

• Japan, Tokyo Consumer Price Index, Friday

• The Bank of Japan releases policy meeting minutes on Friday

• US Personal Income and Spending, Friday

• In China, the peak holiday begins before the Lunar New Year next month, on Friday

Some key movements in the markets:

Stores

• The Stoxx Europe 600 Index was up 0.8% as of 8:17 a.m. London time

• S&P 500 futures rose 0.3%

• Nasdaq 100 futures rose 0.6%.

• Dow Jones Industrial Average futures rose 0.2%

• MSCI Asia Pacific Stock Index rose 0.1%

• MSCI Emerging Markets Index falls 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0893

• There was little change in the Japanese yen at 148.08 to the dollar

• There was no significant change in the yuan in external transactions at 7.2035 to the dollar

• There was little change in the pound sterling at $1.2696

Digital currencies

• Bitcoin fell 2 percent to $40,937.25

• Ethereum fell 2.5% to $2,410.73

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.12%.

• The yield on 10-year German bonds fell by four basis points to 2.30%.

• The yield on British 10-year bonds fell four basis points to 3.89%.

Goods

• Brent crude fell 0.5 percent to $78.20 a barrel

• Gold in spot transactions fell 0.3 percent to $2,022.99 per ounce

This story was produced with assistance from Bloomberg Automation.

—With assistance from Garfield Reynolds, Nicholas Reynolds, and Jason Scott.

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