Europe stocks slip with US futures; dollar advances

Bloomberg

Stocks in Europe edged lower while American equity-index futures retreated as investors scoured corporate earnings to gauge the impact of the coronavirus outbreak. The dollar ticked higher and Treasuries rose.
The Stoxx Europe 600 index declined for the first time in five trading days. ASML Holding NV, a crucial supplier to Samsung Electronics Co., reported a 40% drop in first-quarter earnings and refrained from providing guidance for the next three months amid uncertainty caused by the pandemic. Contracts on all three major US gauges fell after the S&P 500 closed at a one-month high, following earnings from Johnson & Johnson, JPMorgan Chase & Co. and Wells Fargo & Co. that provided a mixed picture. Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. are up next.
Shares in Tokyo erased earlier losses to finished little changed. Chinese and Hong Kong stocks slipped, while Australian equities fell as a record slump in consumer confidence reminded investors of the impact of the pandemic on spending. The yuan dipped after China’s central bank eased
policy further.
The earnings season should provide more of a sense of how the pandemic will affect global commerce. Investor pessimism over the economic damage of the virus is at “extreme” levels with cash positions at the highest since the 9/11 terrorist attacks, according to a Bank of America survey, while the International Monetary Fund (IMF) said the “Great Lockdown” recession would be the steepest in almost a century. Meanwhile, federal official have reportedly started drafting plans to reopen the world’s biggest economy even as global virus infections edge closer to the 2 million mark.
“It’s really going to be about forward guidance,” Erin Gibbs, president and CEO at Gibbs Wealth Management LLC, said on Bloomberg TV. “What we’re really going to be looking for is, are companies giving us an idea of when they think they’ll return to profitability, or, are they talking about more layoffs?”
While futures on the S&P 500 Index dipped 0.7% as of 8:10 am London time, the Stoxx Europe 600 Index decreased 0.2% and the MSCI Asia Pacific Index advanced 0.1%.
While the Bloomberg Dollar Spot Index gained 0.3%, the euro decreased 0.2% to $1.0963 and the British pound fell 0.4% to $1.2569. The Japanese yen strengthened 0.1% to 107.09 per dollar.
The yield on 10-year Treasuries dipped five basis points to 0.70% and Germany’s 10-year yield decreased three basis points to -0.41%. Britain’s 10-year yield fell two basis points to 0.315%.
While West Texas Intermediate crude climbed 0.3% to $20.17 a barrel, gold weakened 0.6% to $1,716.07 an ounce.