Tuesday , August 4 2020

European stocks advance as gold rally cools below $2,000

Bloomberg

European stocks climbed on the back of strong earnings reports. Gold stabilised below $2,000 an ounce and US futures fluctuated.
Games Workshop Group Plc led gains in the Stoxx Europe 600 Index after posting an increase in full-year profit. Peugeot maker PSA Group climbed 3.8% after sticking to its outlook. Silver retreated alongside base metals. The dollar traded near a 22-month low and Treasury yields were little changed. LVMH dropped after the French luxury conglomerate’s earnings missed analyst expectations.
Investors are betting setbacks in the fight against the coronavirus will lead Federal Reserve Chairman Jerome Powell to signal on Wednesday that rates will stay near zero for longer. Health officials are tackling rising cases in countries ranging from Japan and China to Germany, underscoring the difficulty of curbing the pandemic.
Fabiana Fedeli, global head of fundamental equities at Robeco Group, cast doubt on whether further Fed moves to supply liquidity and hold rates low will spark more gains in the biggest stock market.
“What we’re going to need next for another leg up is a better macroeconomic outlook, because the next leg up will come from a rotation into cyclicals,” Fedeli told Bloomberg TV. “Right now you can see some improvement in North Asia. But still not in the US” Meanwhile, US lawmakers are continuing efforts towards the country’s next fiscal stimulus. Senate Republicans presented a $1 trillion proposal as a first step toward negotiating a compromise with Democrats, who’ve offered their own $3.5 trillion plan. The Stoxx Europe 600 Index advanced 0.4% as of 9:31 am London time and futures on the S&P 500 Index were little changed.
Nasdaq 100 Index futures decreased 0.1% and the MSCI Asia Pacific Index increased 0.3%.
While the Bloomberg Dollar Spot Index was little changed, the euro decreased 0.4% to $1.1709. The British pound dipped 0.2% to $1.2854 and the Japanese yen weakened 0.2% to 105.59 per dollar. Bitcoin also sank 0.7% to $10,816.
The yield on 10-year Treasuries decreased less than one basis point to 0.61% and Britain’s 10-year yield increased one basis point to 0.118%. While France’s 10-year yield fell less than one basis point to -0.188%, Australia’s 10-year yield increased three basis points to 0.925%.
West Texas Intermediate crude fell 0.4% to $41.43 a barrel and silver weakened 4.5% to $23.49 per ounce. Gold also weakened 1% to $1,922.56 an ounce.

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