Stocks gain as traders assess prices, China supports: Markets wrap

(Bloomberg) — Stocks started the week on a positive note, tracking Friday’s gains on Wall Street following cautious comments from central bankers in Jackson Hole. China’s supportive measures for its stock market helped lift sentiment.

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The rate-sensitive tech sector led gains in Europe after Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde failed to shake up the outlook for interest rates in Jackson Hole on Friday. Trading volumes were two-thirds below the day’s 30-day average as UK markets closed for the bank holiday.

US equity futures rose, while Treasuries and the dollar were flat. Among individual premarket movers, 3M Co. Gained more than 5% after agreeing to pay more than $5.5 billion to settle lawsuits over military earplugs.

Powell stuck to the script in his Jackson Hole speech, saying the central bank is “ready to raise rates further if appropriate” even as he insisted the Fed would “proceed cautiously” guided by economic data. Lagarde, likewise, said the ECB would set borrowing costs higher to keep inflation under control but stopped short of signaling an increase at the next meeting.

“Not much has been said to change our outlook for U.S. stocks,” RBC Capital Markets strategist Lori Galvacina wrote in a note. “Equity investors are already wrapping their heads around the idea that rates may be high for a long time, the Fed’s job may not be done yet, and they’re data-driven. That message seemed to be reinforced on Friday.

Asian benchmarks rose after Beijing eased a levy on stock trading among other measures. Chinese stocks pared their early gains, however, again showing that efforts to prop up its markets are faltering in the face of economic concerns. Foreign funds accelerated their selling throughout the day, poised to take this month’s outflows to record highs.

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“China authorities are clearly stepping up efforts to rebuild confidence in Beijing’s policy commitment to achieve growth and support the market,” said Xiaojia Ji, Credit Agricole’s chief China economist. “But really changing the mindset requires a fundamental developmental improvement and concrete policy action, so more time may be needed.”

Elsewhere, oil and gold were little changed.

Highlights of this week:

  • American Conference Board Consumer Confidence, Tuesday

  • Eurozone Economic Confidence, Consumer Confidence, Wed

  • US GDP, Total Inventories, Pending Home Sales, Wednesday

  • China manufacturing PMI, non-manufacturing PMI, Thursday

  • Japan Industrial Production, Retail Sales, Thursday

  • Eurozone CPI, Unemployment, Thursday

  • The ECB will publish an account of the July monetary policy meeting on Thursday

  • US Personal Spending and Income, Initial Jobless Claims, Thursday

  • China Caixin Manufacturing PMI, Friday

  • Eurozone S&P Global Eurozone Manufacturing PMI, Friday

  • South African Central Bank Governor Lesetja Kaganyako, Atlanta Fed President Raphael Bostick, BOE’s Hu Bill, IMF’s Geeta Gobinath on the panel at the South African Reserve Bank conference on Friday.

  • Boston Fed President Susan Collins speaks at a virtual event on Friday

  • US Unemployment, Nonfarm Payrolls, Light Vehicle Sales, ISM Manufacturing, Construction Spending, Fri

Some key movements in the markets:

Shares

  • S&P 500 futures were up 0.1% at 6:03 a.m. New York time

  • Nasdaq 100 futures rose 0.2%

  • Futures for the Dow Jones industrial average rose 0.2%

  • The Stoxx Europe 600 rose 0.5%

  • The MSCI world index rose 0.3%

Coins

  • The Bloomberg Dollar Spot Index was little changed

  • The euro rose 0.1% to $1.0807

  • The British pound was little changed at $1.2577

  • The Japanese yen was little changed at 146.58 per dollar

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Cryptocurrencies

  • Bitcoin fell 0.7% to $25,914.28

  • Ether fell 1.2% to $1,634.76

Bonds

  • The yield on 10-year Treasuries was little changed at 4.24%.

  • Germany’s 10-year yield rose two basis points to 2.59%

  • Britain’s 10-year yield rose two basis points to 4.44%

materials

This story was produced with the help of Bloomberg Automation.

–With assistance from John-Patrick Barnert, Farah ElBahravi, and Tasia Sibahudar.

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