European stocks advance as quarter starts; bonds decline

Bloomberg

European stocks edged up in a muted start to third-quarter trading as investors mulled mixed economic data and fresh warnings about the spread of the coronavirus. Treasuries slipped alongside the US equity futures.
The Stoxx Europe 600 Index opened modestly higher, led by oil and gas shares, with data showing German unemployment rose to the highest level
in nearly five years and signs that euro-area manufacturing stemmed its slump in June. Volumes were well below average, while a technical glitch affected trading in the region.
Futures on the S&P 500 drifted lower after the gauge rounded out a 20% second-quarter surge on Tuesday. Shares in Tokyo slid after data showed confidence among large manufacturers in Japan fell to the lowest since 2009, while stocks ticked higher in Shanghai and Sydney.
Though signs have been mounting that the global economy is finding its footing after months of lockdown, accelerating virus infections threaten to set back reopenings and stall the recovery. New cases in America could rise to 100,000 a day if behaviors don’t change, infectious-disease expert
Anthony Fauci said.
“We feel like a lot of the good news is priced in” stock markets including the US, Jim McDonald, chief investment strategist at Northern Trust, said on Bloomberg TV. “The market’s got some optimism that we are going to see more of a V-shaped recovery, so there is risk of some modest disappointment as the economic effect of some of the reversals of the opening up in big states,” plays out.
Elsewhere, oil rose after its best quarter in almost three decades following a report pointing to the first drop in US crude stockpiles since May. Gold was near $1,800 an ounce.
Futures on the S&P 500 Index dipped 0.2% as of 9:37 am London time and the Stoxx Europe 600 Index gained 0.3%.
While Germany’s DAX Index rose 0.7%, the MSCI Asia Pacific Index was little changed.
The Bloomberg Dollar Spot Index declined 0.1% to 1,218.13 and the euro was little changed at $1.1236. As the Japanese yen strengthened 0.4% to 107.52 per dollar, the British pound was little changed at $1.2404.
While the yield on 10-year Treasuries gained two basis points to 0.68%, Germany’s 10-year yield climbed one basis point to -0.44%. Britain’s 10-year yield gained two basis points to 0.195%.
West Texas Intermediate crude increased 2.9% to $40.39 a barrel and gold strengthened 0.4% to $1,788.35 an ounce.