Europe Stock Futures Rise After Wall Street Rally:
- Nasdaq 100 enters bull market in highest close since August
- The dollar and Treasuries flat after calmest day in a month
European equity futures rose while contacts for the US fluctuated along with Asian stocks in listless trading Thursday. The dollar and Treasuries were confined to range-bound trading.
Euro Stoxx 50 futures climbed around 0.6% while those for the S&P 500 and Nasdaq 100 swung between small gains and losses.
Key indexes around Asia held to moves of of 1% or less, underscoring the subdued trade. Japanese stocks fell, Chinese shares whipsawed and Australian and South Korean markets eked out increases. The discordant moves were partly attributed to quarter-end rebalancing.
An initial advance in Hong Kong-listed tech companies fizzled while shares in Alibaba Group Holding Ltd. edged higher. Chief executive Daniel Zhang said the company would consider gradually giving up control of some of its main businesses. His short briefing Thursday came after an overhaul announced earlier in the week that sparked a 12% rally in the stock on Wednesday.
The muted action contrasted with gains overnight on Wall Street that pushed the Nasdaq 100 into a bull market amid bets that a peak in interest rates is near and bank turmoil will continue to ease. The index rose 1.9%, which cemented its 20% rebound from a low in December.
The tech-heavy index, which includes Apple Inc., Microsoft Corp., and Amazon.com, closed at the highest level since August in a sign investors are preparing for the Federal Reserve to end its interest rate hiking cycle and potentially pivot to looser policy later this year.
Treasuries were flat across the curve extending muted action on Wednesday when the 10-year benchmark moving by the smallest margin in more than a month. Australian and New Zealand government bond yields were moderately higher.
The dollar pared an earlier advance in Asia on Thursday after strengthening as investors digested the latest remarks by Fed officials and looked ahead to core PCE data for clues on how the Fed’s next move. Investors now expect US rates to sit around 4.3% by the end of the year, around 70 basis points lower than the current level.
“The Fed remains in a very difficult position,” wrote Chris Senyek of Wolfe Research in a note. “With banks stabilizing, inflation still way above target, the labor market still historically strong, and the Fed desperately needing to rebuild credibility, our sense is that the FOMC will hike by 25 basis points on May 3.”
Investors digested a busy day of Chinese earnings that included Agricultural Bank of China Ltd., Industrial & Commercial Bank of China Ltd., Bank of China Ltd., Bank of Communications Co., Air China Ltd., Country Garden Holdings, Citic Securities Co. and Great Wall Motor Co.
“Analysts are revising up their earnings,” said Audrey Goh, senior cross-asset strategist for Standard Chartered Wealth Management, speaking about Chinese equities on Bloomberg Television. “Consumption, fixed asset investments as well as even the distressed property sector are starting to show some signs of life and recovery.”
Elsewhere in markets, oil held its drop as lagging US diesel demand overshadowed a disruption to shipments from Turkey. Gold steadied and Bitcoin hovered above $28,000.
Key events this week:
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin speaks at event. Treasury Secretary Janet Yellen also speaks, Thursday
- China PMI, Friday
- Eurozone CPI, unemployment, Friday
- US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
- ECB President Christine Lagarde speaks, Friday
- New York Fed President John Williams speaks, Friday