Friday , May 24 2019

S&P 500 futures and Europe stocks jump; havens dip

Bloomberg

US equity futures rose alongside European stocks on Tuesday, shrugging off losses in Asia as investors assessed the prospects for global trade in the wake of a brutal start to the week for markets. Haven assets including Treasuries, gold and the yen slipped.
Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq 100 indexes all rallied after President Donald Trump predicted talks with China will be “very successful” even as the US prepares to hit the country with fresh tariffs.
The Stoxx Europe 600 Index rose, with automakers among the biggest gainers as Volkswagen AG revived plans for a partial share sale of its heavy-trucks division. Bayer AG plunged to the lowest in almost seven years after the company was ordered to pay more than $2 billion in damages related to its Roundup weedkiller.
In Asia, shares in Shanghai posted a modest decline, while Hong Kong equities slumped as the market re-opened after a holiday. The offshore yuan — a key risk indicator due to concern China will use it to retaliate against US tariffs — stabilised after a six-day decline that took it to the weakest levels of the year.
The trade tussle between Washington and Beijing is keeping markets on edge, as investors fear a bigger breakdown could damage global growth. The new penalties
also took aim at farmers, driving down soybean and cotton prices.
“Our expectation is that an agreement is made, but the challenge then becomes the governance of that agreement,” Liam Spillane, head of emerging-markets debt at Aviva Investors, said in an interview in Sydney. “That’s positive — global growth and global trade shouldn’t suffer too much — but we’re likely to still be in a period where we are going to get headline volatility that relates to the compliance” after any deal, he said.
Elsewhere, WTI oil advanced as Saudi Arabia reported drone attacks on pumping stations, throwing the supply outlook into doubt. Bitcoin strengthened past $8,000, extending
its longest winning streak since 2013.
Earnings this week include Alibaba, Tencent, Cisco, Nvidia. Kansas City Fed President Esther George and Richmond Fed President Thomas Barkin make appearances. China industrial production and retail sales are slated for Wednesday, same day as US retail sales and industrial production.
The Stoxx Europe 600 Index increased 0.8% in New York, the largest climb in almost six weeks. Futures on the S&P 500 Index rose 0.8%, the biggest advance in more than a week. The UK’s FTSE 100 Index climbed 1%. Germany’s DAX Index climbed 0.6%. The MSCI Emerging Market Index fell 0.5%. The MSCI Asia Pacific Index sank 0.9%.
The Bloomberg Dollar Spot Index increased 0.1%, the highest in more than a week. The euro rose 0.1% to $1.1233.
The British pound decreased 0.1% to $1.2945. The Japanese yen declined 0.4% to 109.72 per dollar.
The yield on 10-year Treasuries jumped two basis points to 2.42%. Germany’s 10-year yield gained one basis point to -0.06%. Britain’s 10-year yield increased one basis point to 1.111%. Italy’s 10-year yield fell less than one basis point to 2.697%.
West Texas Intermediate crude climbed 1.1% to $61.72 a barrel. Gold fell 0.3% to $1,296.66 an ounce.

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