Friday, July 1

Stocks Rise, Buoyed by China Tech; Dollar Drops: Markets Wrap


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(Bloomberg) — Stocks rose, with European shares heading for the best weekly advance since mid-March. The dollar dropped.

Consumer and retail shares led gains in Europe’s Stoxx 600, while energy stocks underperformed with oil. US futures wavered after shares climbed on Wall Street on signs consumers remain resilient despite inflationary pressures.

Stocks in Asia were buoyed by better-than-expected earnings at Chinese technology companies. Alibaba Group Holding Ltd. and Baidu Inc. beat sales forecasts.

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The dollar extended a slide, with a gauge of the currency versus major peers down almost 3% from a May 12 peak. Treasury yields were steady. Copper and aluminum stabilized after leading a slide in metals on concerns China’s slowdown will sap demand.

Global stocks look set to snap seven weeks of declines that made valuations attractive and enticed investors back into a market still shadowed by worries about inflation and higher interest rates, China’s downbeat economic outlook and the war in Ukraine. Citigroup Inc. strategists now recommend buying European shares on their appealing valuations compared to the US.

“We may see a little bit more stability here because we have repriced the stocks so much already,” Anastasia Amoroso, iCapital chief investment strategist, said on Bloomberg Television. “I don’t know how much this move higher is going to go because I don’t think the fundamentals really justify it near term. In the next three to six months it’s still going to be a constrained market environment.”

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Read: S&P 500 Believers Seeing Light Forming in the Valuation Tunnel

In corporate news, state-owned automaker China FAW Group Co. is considering acquiring a significant stake in the troubled ride-hailing giant Didi Global Inc., according to people familiar with the matter.

Meanwhile, China-US tensions are once again being played out after direct comments from Secretary of State Antony Blinken aimed at Chinese President Xi Jinping. And in a fresh challenge to Beijing, the US and Taiwan are planning to announce negotiations to deepen economic ties.

Russia faces its biggest debt test as $100 million of interest on foreign debt is supposed to reach investors’ accounts by Friday, payments President Vladimir Putin’s government says it has already made.

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Here are some key events to watch this week:

US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.3% as of 8:17 am London timeFutures on the S&P 500 were little changedFutures on the Nasdaq 100 fell 0.2%Futures on the Dow Jones Industrial Average were little changedThe MSCI Asia Pacific Index was little changedThe MSCI Emerging Markets Index rose 0.3%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%The euro rose 0.2% to $1.0751The Japanese yen was little changed at 127.13 per dollarThe offshore yuan rose 0.1% to 6.7587 per dollarThe British pound rose 0.2% to $1.2629

Bonds

The yield on 10-year Treasuries was little changed at 2.74%Germany’s 10-year yield declined two basis points to 0.98%Britain’s 10-year yield declined two basis points to 1.95%

Commodities

Brent crude fell 0.2% to $117.16 a barrelSpot gold rose 0.4% to $1,858.35 an ounce

©2022 Bloomberg LP

Bloomberg.com

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