Stocks advance as growth optimism boosts metals

Bloomberg

European stocks headed for the first gain in three days, spurred by raw-material producers on optimism the global economy is gathering momentum. The dollar gained, paring its worst monthly decline since January.
S&P 500 Index futures edged higher after Anglo American Plc, Glencore Plc and Rio Tinto Plc helped underpin an advance in the Stoxx Europe 600 gauge. Miners are also propelling the MSCI All Country World Index toward a ninth month of gains. HSBC Holdings Plc stoked lenders after reporting earnings that beat estimates. West Texas crude fell back after briefly trading above $50 a barrel for the first time since May, while copper rose to a two-year high and iron ore surged.
Stocks are rebounding from Friday’s selloff as evidence points to resilient global growth, with investors assessing data from the world’s
top three economies. China’s official factory gauge showed continued expansion in June, even as it slipped amid government efforts to curb financial risks. Japan’s industrial output expanded in June, while numbers on Friday showed the US economy accelerating in the second quarter.
“Global expansion dynamics are well underway,” analysts at Candriam Investors Group wrote in a report. “The European recovery is well on track and is leading to above-trend growth in 2017-18. This has led us to increase our profit earnings expectations for euro-zone equities. The economic news flow is starting to become more supportive in the U.S., while emerging markets are benefiting from a good economic momentum.”
Meanwhile, the slew of corporate earnings continues. Apple Inc., Tesla Inc., Berkshire Hathaway Inc. and Toyota Motor Corp. are all set to unveil results this week. HSBC’s second-quarter profit beat analysts’ estimates as outgoing Chief Executive Officer Stuart Gulliver boosted revenue while also trimming costs, and the lender said it will spend up to $2 billion buying back stock.
There’s a stack of data on the U.S. economy due this week; highlights include jobs data that probably shows employers added about 180,000 workers in July. That’s Friday. Also watch out for manufacturing and automaker data on Tuesday. Brazil’s Congress votes on whether to put President Michel Temer on trial on Wednesday. The Bank of England announces a monetary-policy decision on Thursday, with investors expecting the key rate to remain at a record low 0.25 percent. Australia (Tuesday), India (Wednesday), Czech Republic and Ukraine (Thursday), and Romania (Friday) also announce rate decisions. The flood of earnings continues, with tech giants Apple Inc. and Sony Corp. among the stand out names alongside the likes of Berkshire Hathaway Inc., Tesla Inc. and Pfizer Inc. The U.S. Energy Information Administration releases monthly reports Monday.
The Stoxx Europe 600 Index jumped 0.4 percent as of 8:29 a.m. in New York. Basic resources climbed 1.1 percent. Futures on the S&P 500 Index gained 0.1 percent. The MSCI All-Country World Index advanced 0.1 percent. The U.K.’s FTSE 100 Index increased 0.4 percent. The MSCI Emerging Market Index climbed 0.3 percent.
The Bloomberg Dollar Spot Index advanced 0.2 percent, paring its fifth straight monthly drop to 2.1 percent. The euro decreased 0.2 percent to $1.1731. The British pound declined 0.1 percent to $1.3119.
The yield on 10-year Treasuries declined less than one basis point to 2.30 percent. Germany’s 10-year yield climbed two basis points. Britain’s 10-year yield decreased one basis point. West Texas Intermediate crude fell 0.6 percent to $49.46 a barrel, the first retreat in more than a week. Copper climbed 0.7% to $2.90 a pound, the highest in more than two years. Gold declined 0.1 percent to $1,268.55 an ounce.
The Japanese yen increased 0.1 percent to 110.58 per dollar, the strongest in six weeks. Japan’s Topix index closed 0.2 percent lower after swinging between gains and losses. Australia’s S&P/ASX 200 Index rose 0.3 percent and South Korea’s Kospi index added 0.1 percent.