European stocks, futures rise as traders weigh China risks

Bloomberg

European stocks and US index futures rise as investors assessed whether global growth can withstand a slowdown in China and a global energy crunch.
Contracts on the S&P 500 Index advanced 0.3% after a three-day rally in US stocks. Treasury yields advanced as traders braced for speeches by Federal Reserve policy makers this week. Tightening oil supplies sent West Texas Intermediate crude above $75 per barrel. Blank-check company Gores Guggenheim Inc. surged in premarket trading after nearing a merger deal.
Even as China Evergrande’s debt crisis festers, data due this week may show a manufacturing recovery in the world’s
second-largest economy is faltering. A developing energy crisis threatens to crimp global growth further at a time markets are preparing for a tapering of Fed stimulus. The week could see volatile moves as traders scrutinise central bankers’ speeches, including Chair Jerome Powell’s meetings with Congressional panels.
“Most bad news come from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group Holdings, wrote in a note. “The Evergrande debt crisis, the Chinese energy crackdown on missed targets and the ban on cryptocurrencies have been shaking the markets, along with the Fed’s more hawkish policy stance last week.”
The euro slipped against the dollar as the German election failed to produce a clear winner, raising the concerns of a prolonged decision on the leadership of Europe’s biggest economy.
Energy and bank stocks sent Europe’s benchmark Stoxx 600 gauge higher. Rolls-Royce extended a rally to the highest since June 2020 after the company was selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program.
The 10-year Treasury yield added three basis points to 1.48%, the highest since July 1. On Tuesday, Powell will join Treasury Secretary Janet Yellen in addressing the “Cares Act Oversight of the Treasury and Federal Reserve” and on Thursday, the two appear before the House Financial Services Committee for a hearing on their pandemic response.
Polestar, the electric-carmaker controlled by Volvo Car AB and its owner Zhejiang Geely Holding Group Co., has agreed to go public through a merger with Gores, according to people with knowledge of the matter.
The Stoxx Europe 600 rises 0.3% as of 9:44 am London time and futures on the S&P 500 also climb 0.3%.
While futures on the Nasdaq 100 were little changed, futures on the Dow Jones Industrial Average climb 0.4%. The MSCI Asia Pacific Index was little changed and the MSCI Emerging Markets Index was also little changed.
The Bloomberg Dollar Spot Index was little changed and the euro falls as much as 0.2% to $1.1693.
While the Japanese yen falls 0.2% to 110.90 per dollar, the offshore yuan was little changed at 6.4635 per dollar and the British pound rises 0.1% to $1.3699.
The yield on 10-year Treasuries advanced three basis points to 1.48% and Germany’s 10-year yield advanced one basis point to -0.22%. Britain’s 10-year yield advanced three basis points to 0.95%.
While Brent crude rises 1.1% to $78.98 a barrel, spot gold was little changed.