European stocks rise with US futures; dollar extends gain

Bloomberg

European stocks rose alongside US equity futures on Thursday, trimming some losses from a day earlier as investors seeking to gauge the extent of damage caused by the coronavirus await the next set of corporate earnings and
economic data.
The dollar extended gains.
The Stoxx Europe 600 Index opened higher with all sectors and major national gauges in the green. Contracts for the three main American benchmarks also advanced after sliding on Wednesday amid miserable economic data. Shares fell in Hong Kong and Japan while stocks in China saw modest gains. Treasuries edged lower after rallying a day earlier and oil fluctuated near its lowest in two decades.
Global earnings revisions have stabilised as reporting season begins.
The market is now bracing for the weekly US unemployment figures as both corporate results and economic data highlight the severe hit from the shutdown of industry and commerce needed to combat the spread of the coronavirus. US retail sales and factory output posted historic declines in March, and surveys in April looked even worse. Manufacturing in New York state and sentiment among American homebuilders plunged.
“The economic reality and corporate earnings reality, at some stage, needs to reconcile with the markets,” Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management, said in a phone interview. “The market hasn’t fully factored in the uncertainties or potential risks in terms of earnings downgrades.”
Meanwhile, President Donald Trump said data suggest the US has “passed the peak” on new cases and added he will announce on Thursday guidelines to relax stay-at-home rules. Covid-19 has now infected 2 million people globally, with fatalities topping 134,000.
“We don’t know what the economy is going to look like over the next year — there is a lot of uncertainty with the virus,” Mark Kiesel, global credit chief investment officer at Pacific Investment Management Co., said on Bloomberg TV. “We are not through the woods yet — there could be a second wave.”
Elsewhere, oil fluctuated after tumbling on Wednesday amid a record collapse in fuel demand and the biggest ever weekly increase in US domestic crude supplies. Mexico’s peso retreated after Fitch downgraded the country’s debt rating, while the Philippines cut rates in an unscheduled move.
Futures on the S&P 500 Index rose 0.8% as of 8:08 am London time and the Stoxx Europe 600 Index rose 1.1%.
The MSCI Asia Pacific Index decreased 0.9%.
While the Bloomberg Dollar Spot Index increased 0.3%, the euro decreased 0.2% to $1.0885. The British pound fell 0.1% to $1.25 and the Japanese yen weakened 0.3% to 107.79 per dollar.
The yield on 10-year Treasuries climbed two basis points to 0.65% and Germany’s 10-year yield gained two basis points to -0.45%. Britain’s 10-year yield also rose one basis point to 0.312%.
While West Texas Intermediate crude climbed 0.2% to $19.91 a barrel, gold strengthened 0.3% to $1,722.52 an ounce.