Monday , May 17 2021

European stocks drift as tech weighs; dollar gains

Bloomberg

European stocks struggled for traction and US futures slipped on Tuesday as technology shares continued to weigh on equities following weakness among sector giants on Wall Street. The dollar rallied.
The Stoxx 600 Index erased a gain as online food delivery service HelloFresh and semiconductor firm Infineon Technologies AG dragged the benchmark lower. Travel firms gained after the European Union announced plans to reopen its borders to tourists after months of pandemic-induced restrictions. Shares rise in Hong Kong, Australia and South Korea.
US futures fall after Tesla Inc and Amazon.com Inc weighed on the Nasdaq 100. Treasuries slipped alongside most European bonds, while a gauge of commodity prices hovered at the highest level since 2012. Digital token Ether extended its surge to set another record as larger rival Bitcoin slipped.
As the global economic recovery gathers pace thanks to successful vaccine rollouts in much of the developed world, investors nevertheless remain attuned to risks. Inflation is a chief concern, with a gauge of prices paid for materials jumping to the highest since 2008. The breadth of the rebound is also in question, after Federal Reserve Chair Jerome Powell said that economic progress has been uneven across racial and income divides.
Meanwhile, fierce new Covid-19 waves are enveloping India and parts of Southeast Asia, placing severe strain on their health-care systems and prompting appeals for help.
“We do believe that inflationary pressures will continue this year and that’s driven by the kind of policy we have seen globally,” Rupal Agarwal, a quantitative strategist at
Sanford C Bernstein, said on Bloomberg TV. “In the shorter term you can expect some pullback in the markets but the broader sentiment remains bullish” as the reopening and reflation trade remains in force, she said.
Futures on the S&P 500 Index fall 0.3% as of 8:49 am London time and the Stoxx Europe 600 Index was little changed. While the MSCI Asia Pacific Index declined 0.1%, the MSCI Emerging Market Index was little changed.
The Bloomberg Dollar Spot Index advanced 0.4% and the euro sinks 0.4% to $1.2014.
The British pound declined 0.3% to $1.3863 and the onshore yuan was little changed at 6.475 per dollar. The Japanese yen weakened 0.3% to 109.43 per dollar.
While the yield on 10-year Treasuries jumped two basis points to 1.61%, the yield on two-year Treasuries advanced one basis point to 0.16%. Germany’s 10-year yield gained less than one basis point to -0.20%.
Britain’s 10-year yield dipped less than one basis point to 0.84% and Japan’s 10-year yield was unchanged at 0.097%. West Texas Intermediate crude increased 0.1% to $64.57 a barrel and Brent crude increased 0.2% to $67.67 a barrel and gold weakened 0.4% to $1,785.50 an ounce.

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