Stocks struggle amid mixed income; Bond gains: market envelope


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(Bloomberg) – Stocsk in Europe fell to near record on Wednesday and bonds gained amid mixed earnings reports, lower commodity prices and new concerns about the region’s economy .

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Mining stocks led the Stoxx Europe 600 index down as commodity prices, especially aluminum and iron ore, fell along with crude oil. Germany’s DAX underperformed after Europe’s largest economy cut its growth forecast for 2021, citing the lingering effects of the pandemic and a squeeze in supply. Bund yields fell along with those of other European bonds.

Some of the top results and business news from Wednesday:

  • Deutsche Bank AG fell more than 3% after disappointing earnings, while Banco Santander SA fell despite bullish prospects.

  • Heineken NV fell after reporting a drop in demand for beer.

  • BASF SE slipped after reporting declining yields from its basic chemicals line as global spray supply catches up with demand.

  • Dutch semiconductor equipment maker ASM International NV advanced after revenue forecasts beat analysts’ estimates.

  • Puma SE won after raising its profit forecast for the full year.

  • Temenos AG jumped 16% after Bloomberg announced that EQT AB was considering an acquisition of the Swiss banking software specialist.

Futures on the S&P 500 and Nasdaq 100 fluctuated amid a mixed reaction to big tech earnings released later in Tuesday’s US session. Shares fell in Japan and Chinese tech stocks slipped amid concerns over closer scrutiny by Washington after the United States banned the U.S. operations of China Telecom. Treasury yields declined slightly and the dollar remained stable.

Investors are counting on earnings to support stock prices, and the reporting season so far has been broadly strong. But concerns remain that over time rising raw material and wage costs and supply chain grunts could squeeze margins and weigh on the recovery of the global economy.

“While some significant profit lapses have clouded the picture, the reality is that overall the reporting season has been very strong so far,” said Max Kettner, multi-asset strategist at HCBC Holdings Plc. “Everyone, literally everyone, in the market right now is worried about supply chain constraints, higher input costs, etc., so the headwinds on that side are building up. now reflect very well in short-term earnings expectations. “

The debt crisis in the Chinese real estate sector continues to weigh on the market: the authorities have asked billionaire Hui Ka Yan to use his personal fortune to alleviate the woes of the China Evergrande group. Meanwhile, a leading Chinese regulator has called on companies to make “active preparations” to deal with payments on offshore bonds.

Meanwhile, the energy crisis continues to impact the global economy. US power station coal inventories have fallen to their lowest in at least 24 years. WTI crude oil slipped below $ 84 a barrel.

Gold fell back below $ 1,800 an ounce and Bitcoin plunged below $ 59,000. On the virus front, a Food and Drug Administration panel has supported Pfizer Inc. and BioNTech SE vaccines for young children.

Here are some events to watch this week:

  • Profits: Amazon, Apple, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group

  • Australia CPI, Wednesday

  • US wholesalers’ inventories, US durable goods, Wednesday

  • Bank of Japan Monetary Policy Decision Briefing Thursday

  • ECB decision on rates, briefing by President Christine Lagarde, Thursday

  • US GDP, first jobless claims, Thursday

  • Joint meeting of G-20 finance and health ministers ahead of weekend leaders’ summit on Friday

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

  • The Stoxx Europe 600 fell 0.3% at 10:26 am London time

  • S&P 500 futures have not changed much

  • Nasdaq 100 futures have not changed much

  • Futures contracts on the Dow Jones Industrial Average have changed little

  • MSCI Asia-Pacific index fell 0.4%

  • MSCI Emerging Markets index fell 0.9%

Currencies

  • The Bloomberg Dollar Spot Index changed little

  • The euro was little changed at $ 1.1592

  • The Japanese yen rose 0.5% to 113.60 per dollar

  • The offshore yuan fell 0.3% to 6.3948 per dollar

  • The British pound lost 0.3% to $ 1.3728

Obligations

  • The yield on 10-year treasury bills fell two basis points to 1.59%

  • German 10-year yield fell four basis points to -0.16%

  • UK 10-year yield fell five basis points to 1.06%

Merchandise

  • Brent crude fell 1.4% to $ 85.21 a barrel

  • Spot gold fell 0.4% to $ 1,786.15 an ounce

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