Wednesday , September 30 2020

Stocks climb with focus shifting to earnings, Fed

Bloomberg

US equity futures climbed along with stocks in Europe as corporate earnings and the Federal Reserve rates decision on Wednesday gave investors a fresh focus while concerns linger over the deadly coronavirus. Treasuries gained with most European bonds.
Mining and construction shares led the Stoxx Europe 600 index higher, with 17 of 19 industry sectors in the green. Contracts on the three major American indexes edged up, suggesting they may extend the previous rally. General Electric Corp rose in the pre-market after its earnings beat the highest estimate.
Most Asian benchmarks gained, though Hong Kong’s tumbled in a catch-up with the global sell-off since that market shut for holidays. China remains closed, but futures on Chinese shares nudged higher after two days of losses.
The offshore yuan steadied in the wake of a senior White House official denying a report that suspending US-China flights was under consideration, helping ease some concerns amid mounting evidence of a near-term economic hit from the illness. Crude oil in New York extended its rebound from a three-month low earlier this week. The dollar edged higher against a basket of peers, while the euro headed for a two-month low.
Markets are calming from the epidemic’s initial blow to investor confidence. They’re buoyed in part by positive US economic data and earnings reports. Apple Inc rose in post-market trading after its sales forecast topped estimates even after factoring in disruptions from the virus.
With the Fed seen staying on hold Wednesday, investors will look for signs of how the disease may affect operations as heavyweights including Samsung Electronics Co and Exxon Mobil Corp report.
“We are seeing economic data points that support this continued recovery,” Susan Schmidt, a fund manager at Aviva Investors, told Bloomberg TV.
“The coronavirus might have tamped that down just a bit,
but overall management teams are coming back and giving a pretty positive outlook and feeling confident about their businesses.”
Elsewhere, emerging-market stocks extended a losing streak to five days, the longest in five months. Most developing-nation currencies declined against the dollar, with Russia’s ruble leading losses.
Samsung Electronics, International Paper, Unilever and Shell report on Thursday, followed by South Korean chip maker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.
Federal Reserve policy makers on Wednesday were expected to open 2020 the same way they closed 2019 — by holding rates steady.
Goldman Sachs was expected to hold its first-ever Investor Day on Wednesday.
The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.
The US reports fourth-quarter GDP on Thursday.
The UK is scheduled to leave the European Union on Friday.
The Stoxx Europe 600 Index gained 0.4% in New York. Futures on the S&P 500 Index increased 0.3%. The MSCI All-Country World Index was little changed. The UK’s FTSE 100 Index climbed 0.1%.
The Bloomberg Dollar Spot Index climbed 0.1%. The euro declined 0.2%. The British pound dipped 0.1% to $1.3012. The Japanese yen strengthened 0.1% to 109.07 per dollar.
The yield on 10-year Treasuries declined three basis points to 1.63%. The yield on two-year Treasuries decreased two basis points to 1.44%. Germany’s 10-year yield dipped three basis points to -0.37%. Britain’s 10-year yield fell one basis point to 0.538%.
West Texas Intermediate crude rose 0.7% to $53.87
a barrel. Gold strengthened 0.2% to $1,571 an ounce. Iron ore gained 2% to $84.94 per metric ton.

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