Stocks advance on few signs China stimulus taking hold

BLOOMBERG

European stocks climbed, bolstered by signs China’s stimulus measures are seeping through into the economy and wagers that global interest rates are approaching a peak.
The Stoxx 600 gauge rose 0.9%, halting three days of losses. Gains were led by resources shares, including mining giants Rio Tinto Plc, Glencore Plc and Anglo American Plc, as metals prices rallied. A gauge of luxury shares, heavily reliant on China for sales, also rose. Energy shares were steady as oil prices eased after earlier hitting their highest levels since November on expectations of supply cuts from the Opec+ producers group.
US markets were expected to  be shut on Monday for the Labor Day holiday but futures advanced after the S&P 500 Index posted its best week since June.  Market sentiment has been boosted by Friday’s US jobs report that showed a steadily cooling labour market, offering the Federal Reserve room to pause rate increases this month. Markets extended gains on Monday on news of a weekend surge in home sales in two of China’s biggest cities, an early sign that government efforts to cushion a record housing slowdown is helping.
Shanghai and Beijing are seen benefiting the most from authorities’ announcement  that lowered down-payment thresholds across the nation. The Hang Seng index jumped more than 3% on Monday before paring gains, while a Bloomberg gauge of Chinese developer shares jumped as much as 8.7%.
“We have been looking for more significant property rescue measures for some time to shore up sentiment and consumer confidence,” UBS Global Wealth Management Chief Investment Officer Mark Haefele said. “This now appears to be materialising in a more convincing way.”
Oil prices steadied, with WTI crude flat around $85.53 per barrel after climbing last week on Russia’s announcement that it will extend export curbs. Saudi Arabia — which along with Moscow sets the tone at the Opec+ alliance — is widely expected by traders to follow suit by pushing its voluntary curbs into October.
Bond yields inched higher in the euro zone, with rate-setters seemingly divided on whether policy needs to be tightened further this month, given above-forecast inflation and sluggish growth. In the US, many bond investors reckon the Fed’s 18-month tightening cycle is finally ending, bets that were reinforced after the jobs data. “The incoming data supports our view of a ‘softish’ landing for the US economy,” Haefele of UBS said.
However, this year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.  Central banks in Australia and Canada are expected to keep interest rates unchanged this week.