Global stocks gain as corporate earnings roll in; dollar steadies

Bloomberg

Global stocks advanced following the latest set of corporate results, with European shares tracking a jump in Asian peers on both earnings and promising economic data. The US dollar stayed higher as consumer spending figures matched forecasts. The Stoxx Europe 600 Index was once again poised to end its losing streak, heading for the first gain in four days after companies including oil giant BP Plc beat estimates. US stock futures also rose, while Treasury yields edged higher. Recent commodity strength continued to feed into Asian equities, which were also bolstered by earnings in Japan, South Korean export numbers and Chinese manufacturing data. Crude erased an increase, even as traders await US government data forecast to show
stockpiles extended declines.
As economic data largely supports the global growth story and company earnings in many cases beat estimates, investors will be forgiven for diving further into a bull market that’s propelled equity markets the world over to unprecedented levels. But with valuations well above average, monetary policy poised to turn hawkish and a US administration mired in controversy there remains a degree of caution in markets.
Figures from gross domestic product and economic confidence to joblessness and manufacturing output signaled the euro-area economy was gaining steam, but it wasn’t enough to reverse a drop in the euro and most benchmark government bonds rose.
Meanwhile, the Reserve Bank of Australia held the benchmark at 1.5 percent while warning that a rising currency is expected to subdue inflation and weigh on the outlook for growth and employment. The Aussie fluctuated, dipping below 80 US cents and jumping as high as 80.43 cents.
Apple earnings hit after the US close. Analysts expect a somewhat cautious outlook due to potential delays in the new iPhone introduction. Brazil’s Congress votes on Wednesday on whether to put President Michel Temer on trial. Bank of England Governor Mark Carney may signal a more hawkish tone at its quarterly Inflation Report on Thursday. The central bank will likely keep rates on hold. US jobs data will probably show employers added about 180,000 workers in July. That’s Friday. Rate decisions are due in India (Wednesday), Czech Republic a
nd Ukraine (Thursday), and
Romania (Friday).
The MSCI All-Country World Index climbed 0.3 percent as of 8:37 a.m. in New York, the highest on record on a closing basis. The Stoxx Europe 600 Index increased 0.5 percent. Futures on the S&P 500 Index advanced 0.2 percent. The UK’s FTSE 100 Index jumped 0.8 percent, the biggest increase in almost three weeks. Germany’s DAX Index jumped 0.7 percent, the largest climb in almost three weeks. The MSCI Emerging Market Index gained 0.1 percent.
The Bloomberg Dollar Spot Index advanced 0.1 percent to 1,154.53. The euro decreased 0.2 percent to $1.1817. The British pound declined less than 0.05 percent to $1.3213.
The yield on 10-year Treasuries advanced one basis point to 2.30 percent. Germany’s 10-year yield decreased two basis points to 0.53 percent, the lowest in more than a week. Britain’s 10-year yield gained less than one basis point to 1.234 percent, the highest in a week.
West Texas Intermediate crude fell 0.6 percent to $49.86 a barrel, the first retreat in more than a week. Gold fell 0.2 percent to $1,266.84 an ounce, the biggest fall in a week. Iron ore climbed 3.4 percent to 574 yuan per metric ton, the highest in more than four months.
The MSCI Asia-Pacific Index rose to the highest since 2007 as equity indexes from Tokyo to Sydney advanced. Japan’s Topix index added 0.6 percent. Banks rallied after Sumitomo Mitsui Financial Group Inc. reported a 31 percent increase in net income for the June quarter. Australia’s S&P/ASX 200 Index closed 0.9 percent higher, while South Korea’s Kospi index ended up 0.8 percent. The Hang Seng Index in Hong Kong rose 0.8 percent, while the Shanghai Composite Index climbed 0.6 percent.