U.S. stocks market mostly high as traders assess rates, China support lift sentiment

Stocks started the week on a positive note, tracking Friday’s gains on Wall Street following cautious comments from central bankers at Jackson Hole. China’s support measures for its equities market helped lift sentiment.

The rate-sensitive technology sector led the advance in Europe after Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde at Jackson Hole on Friday failed to shake the outlook for interest rates. With UK markets closed for a bank holiday, trading volumes were two-thirds lower than the 30-day average for this time of day.

U.S. equity futures edged higher, while Treasuries and the dollar were steady. Among individual premarket movers, 3M Co. gained more than 5 per cent after agreeing to pay more than US$5.5 billion to resolve lawsuits related to military earplugs.

Powell stuck to the script in his Jackson Hole speech, saying that the Fed is “prepared to raise rates further if appropriate,” even as he stressed that the central bank would “proceed carefully,” guided by economic data. Lagarde, likewise, said the ECB would set borrowing costs as high as needed to keep inflation in check but stopped short of signaling an increase at the next meeting.

“Not much was said that changed our outlook for U.S. equities,” RBC Capital Markets strategist Lori Calvasina wrote in a note. “Equity investors have already been wrapping their heads around the idea that rates may be higher for longer, that it’s possible the Fed’s job may not be done just yet, and that they are data dependent. That message seemed reinforced Friday.”

Asian benchmarks rose after Beijing reduced the levy charged on stock trades, among other measures. Chinese stocks pared most of their early gains, however, showing once again that efforts to boost its markets are falling flat in the face of economic worries. Foreign funds accelerated their selling through the day, poised to take this month’s outflows to the biggest on record.

 

“The China authorities are clearly stepping up efforts to rebuild confidence in Beijing’s policy commitment to achieve growth and support the market,” said Xiaojia Zhi, chief China economist at Credit Agricole. “But then a fundamental growth improvement as well as tangible policy action onshore is needed to really turn the mood around, and therefore more time could be needed.”

Key events this week:

• U.S. Conference Board consumer confidence, Tuesday
• Eurozone economic confidence, consumer confidence, Wednesday
• U.S. GDP, wholesale inventories, pending home sales, Wednesday
• China manufacturing PMI, non-manufacturing PMI, Thursday
• Japan industrial production, retail sales, Thursday
• Eurozone CPI, unemployment, Thursday
• ECB publishes account of July monetary policy meeting, Thursday
• U.S. personal spending and income, initial jobless claims, Thursday
• China Caixin manufacturing PMI, Friday
• Eurozone S&P Global Eurozone Manufacturing PMI, Friday
• South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s
• Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
• Boston Fed President Susan Collins speaks at virtual event, Friday
• U.S. unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday

  

Some of the main moves in markets:

 

Stocks

• S&P 500 futures rose 0.1 per cent as of 6:03 a.m. New York time
• Nasdaq 100 futures rose 0.2 per cent
• Futures on the Dow Jones Industrial Average rose 0.2 per cent
• The Stoxx Europe 600 rose 0.5 per cent
• The MSCI World index rose 0.3 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1 per cent to US$1.0807
• The British pound was little changed at US$1.2577
• The Japanese yen was little changed at 146.58 per dollar

Cryptocurrencies

• Bitcoin fell 0.7 per cent to US$25,914.28
• Ether fell 1.2 per cent to US$1,634.76

Bonds

• The yield on 10-year Treasuries was little changed at 4.24 per cent
• Germany’s 10-year yield advanced two basis points to 2.59 per cent
• Britain’s 10-year yield advanced two basis points to 4.44 per cen

Commodities

• West Texas Intermediate crude rose 0.5 per cent to US$80.20 a barrel
• Gold futures were little changed

 

This article was reported by BNNBloomberg