Europe Stocks Fall on Lack of More China Stimulus: Markets Wrap
(Bloomberg) — European stocks dropped after China’s latest pledge to support its economy disappointed investors hoping for a fresh wave of stimulus.
The Stoxx 600 index fell 0.7% as Chinese officials merely reiterated vows to meet economic targets and held back from mentioning further measures to boost the economy. European mining and luxury stocks, the sectors most exposed to China, fell the most, with Kering SA and Burberry Plc down more than 5%.
US-listed Chinese stocks tumbled in premarket trading while earlier, a gauge of Chinese shares in Hong Kong tumbled the most intraday since 2008. Commodity markets also felt the impact, with oil prices slipping below $80.
“The enthusiasm around China stimulus is fading somewhat,” said Benoit Anne, investment director at MFS Investment Management.
Anne said, though, that risk sentiment remains robust overall, with interest rates set to fall in the US and Europe, even though it had been dented by the China factor, a rise in bond yields and the conflict in the Middle East.
Treasury yields slipped back slightly, however, after rising past 4% on Monday as investors dialed back bets on Federal Reserve interest-rate cuts. US equity futures also steadied after Monday’s slide, with contracts on the S&P 500 and Nasdaq 100 up about 0.3%.
Markets’ focus will now train on US inflation data, due Thursday, to gauge the Fed’s policy-easing path. Swaps are pricing the Fed to cut by less than a quarter-point at its November meeting, a view reinforced by comments from Federal Reserve governor Adriana Kugler who urged a “balanced approach” to future rate cuts.
On the corporate front, big US banks kick off the earnings season in earnest from Friday, with companies’ guidance for the coming quarters seen as particularly key.
“Now most of investors will be looking to build a 2025 outlook and getting a steer from the corporate sector on how it is thinking about earnings picture going into next year,” said Shaniel Ramjee, senior investment manager at Pictet Asset Management.
Among individual stock movers, Super Micro Computer Inc. rose more than 2.5% in premarket trading after shipment data suggested robust demand for its servers. In Europe, housebuilder Vistry Group Plc dropped as much as 36% after slashing its profit forecast.
Key events this week:
- Fed’s Raphael Bostic, Susan Collins, Philip Jefferson and Adriana Kugler speak, Tuesday
- Fed minutes, Wednesday
- Fed’s Lorie Logan, Raphael Bostic, Austan Goolsbee and Mary Daly speak, Wednesday
- US initial jobless claims, CPI, Thursday
- Fed’s John Williams and Thomas Barkin speak, Thursday
- JPMorgan, Wells Fargo kick off earnings season for the big Wall Street banks, Friday
- US PPI, University of Michigan consumer sentiment, Friday
- Fed’s Lorie Logan, Austan Goolsbee and Michelle Bowman speak, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 fell 0.7% as of 10:23 a.m. London time
- S&P 500 futures rose 0.3%
- Nasdaq 100 futures rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.1%
- The MSCI Asia Pacific Index fell 2.2%
- The MSCI Emerging Markets Index fell 2.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.1% to $1.0989
- The Japanese yen rose 0.3% to 147.75 per dollar
- The offshore yuan rose 0.2% to 7.0543 per dollar
- The British pound was little changed at $1.3096
Cryptocurrencies
- Bitcoin fell 0.9% to $62,428.48
- Ether fell 0.7% to $2,425.07
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.01%
- Germany’s 10-year yield was little changed at 2.26%
- Britain’s 10-year yield was little changed at 4.21%
Commodities
- Brent crude fell 2.1% to $79.26 a barrel
- Spot gold fell 0.1% to $2,638.64 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao and Aya Wagatsuma.
©2024 Bloomberg L.P.
