US futures steady, stocks advance despite Iran fear

Bloomberg

US equity futures were steady on Tuesday and stocks in Europe and Asia advanced as investors attempted to set aside their fears about escalating tensions in the Middle East. Treasuries fluctuated and the euro declined.
Markets were roiled before the European open when an Iranian news agency said the country is assessing scenarios for its response to the US killing of a military leader.
Contracts for the S&P 500 gave up all of the morning’s advance before steadying. The Stoxx Europe 600 Index tracked Monday’s gains on Wall Street after a strong session for Asian equities.
Crude headed for the first decline in four days. European bonds were mixed and the euro weakened as regional inflation data met expectations. Gilts dropped after the UK’s Debt Management Office said sales of the securities will increase. Gold drifted in a narrow range, flirting with its seventh straight advance.
The yuan strengthened and Chinese shares were among the best performers in Asia as optimism over the trade outlook grew.
Investors appear to have started the first full trading week of 2020 in a defiantly upbeat mood.
Despite the unfolding crisis in the Middle East, which triggered a broad sell-off, risk appetite has returned and big money managers are showing few signs of panic.
“There are a lot of developments in play but none of them are really that major,” John Normand, JPMorgan Chase & Co’s head of cross-asset fundamental strategy, told Bloomberg TV. “There are a lot of headlines that seem alarming at first blush and we dig a bit deeper, to me none of these are big derailers for the move up in risky markets this year.”
Iran’s semi-official news organisation Fars on Tuesday cited the head of the country’s national security council saying the nation is assessing 13 possible scenarios for retaliation against the killing of Qassem Soleimani. Three dozen mourners were crushed to death in a stampede at his funeral, Iranian state TV reported.
US ISM non-manufacturing PMI comes on Tuesday.
Federal Reserve officials Richard Clarida, John Williams, James Bullard and Charles Evans speak on Thursday.
The US monthly employment report is due on Friday.
Futures on the S&P 500 Index were little changed in New York. The Stoxx Europe 600 Index gained 0.4%. The UK’s FTSE 100 Index increased 0.1%. The MSCI Asia Pacific Index gained 0.9%.
The Bloomberg Dollar Spot Index increased 0.1%. The euro declined 0.1% to $1.1181.
The British pound fell 0.2% to $1.3148. The Japanese yen was little changed at 108.40 per dollar.
The yield on 10-year Treasuries declined one basis point to 1.80%. Germany’s 10-year yield decreased less than one basis point to -0.29%. Britain’s 10-year yield increased one basis point to 0.777%.
West Texas Intermediate crude declined 0.8% to $62.75 a barrel. Gold climbed 0.2% to $1,568.17 an ounce.