European stocks advance while Nasdaq futures slide

Bloomberg

European stocks climbed as analysts speculated the market could be relatively resilient as Asian and US markets start pulling back. The pound weakened on concern the UK is inching closer to a no-deal Brexit.
The Europe Stoxx 600 opened higher on Monday with broad gains across industry groups. The dollar index strengthened, while oil extended a retreat below $40 a barrel after Saudi Arabia cut pricing. Treasury yields were little changed.
Stock futures pointed to further losses for American shares when markets re-open on Tuesday after the Labor Day holiday. Nasdaq futures slid 1.4% and contracts on the S&P 500 were down 0.6%. Valuation is emerging as a concern for US investors and there’s also nervousness about extreme positions in technology stocks.
In Asian stock markets, trading was mixed. Shares dipped in Japan and China, while Australia and South Korea climbed. SoftBank Group Corp. shares slumped 7% after reports that the Japanese conglomerate made massive bets on options trades linked to US tech stocks.
Global equities drop the most since June last week as doubt crept into investors’ minds about whether equities have risen too quickly and valuations are reaching extremes. US technology shares, which have seen a powerful rally through the depths of the pandemic, showed signs of buckling at the end of the week amid reports that huge options bets were fanning their gains.
“I see this past week as more than just a short-run reversal,” said Jim McCormick, global head of desk strategy at NatWest Markets. “I think it is the start of an environment of lower asset returns and higher market volatility.” He added, “the bigger problem for risk assets is growth.”
In China, data on Monday continued to suggest a patchy recovery. Exports continued to expand in August as the country’s major trading partners gradually resumed business activities, though imports have unexpectedly dropped.
Futures on the S&P 500 Index drop 1.8% as of 8:21 am London time and the Stoxx Europe 600 Index decreased as much as 0.5%.
While the MSCI Asia Pacific Index sank 1.7%, the MSCI Emerging Market Index dipped 1.3%.
The Bloomberg Dollar Spot Index advanced 0.1% and the euro declined 0.1% to $1.1829.
While the British pound decreased 0.5% to $1.3209, the Japanese yen was little changed at 106.23 per dollar. The offshore yuan was little changed at 6.8357 per dollar.
The yield on 10-year Treasuries jumped eight basis points to 0.72% and the yield on two-year Treasuries climbed two basis points to 0.14%.
While Germany’s 10-year yield increased three basis points to -0.46%, Britain’s 10-year yield gained four basis points to 0.273% and Japan’s 10-year yield climbed one basis point to 0.045%.
West Texas Intermediate crude sank 5.1% to $39.18 a barrel and Brent crude sinks 4.3% to $42.10 a barrel. Gold weakened 0.1% to $1,929.41 an ounce.