(Bloomberg) — Stocks continued to rise as an onslaught of strong financial results from technology companies strengthened the overall image of the corporate sector.
Most Read Articles on Bloomberg
Nasdaq 100 futures rose 0.9% after the index closed at a new all-time high on Tuesday. The premarket rally was led by a 10% rise in Netflix Inc., which saw better-than-expected subscriber numbers, and rebounded after eBay Inc. pledged to cut about 9% of its workforce.
All eyes will be on the tech sector, with Tesla Inc. and International Business Machines Inc. reporting their financial results later in the day. But more broadly, the U.S. earnings season so far has shown that companies are coping well with rising interest rates.
“The stock market is in a bit of a sweet spot at the moment,” said François Limoux, a strategist at La Française Asset Management in Paris. He said: “The US economic news flow is good and European growth is flat, but this is not a drama and no one believes inflationary pressures will return.”
He added that “revenues in the U.S. high-tech and artificial intelligence sectors are also strong, which themselves support the broader market.”
Europe's Stoxx 600 index rose 1%, led by gains in ASML Holding NV, the continent's most valuable technology company, after orders more than tripled. Software company SAP SE rose after announcing a restructuring plan to boost profits and sharpen its focus on artificial intelligence.
Read: Hedge fund stars who got China wrong are paying a high price
Attention now turns to policy meetings at the Bank of Canada later in the day and at the European Central Bank on Thursday. Both are expected to keep rates unchanged, but could give an indication of the approximate timing of their first rate cut.
Eurozone bond yields fell after data showed business activity contracted in January for the eighth straight month. Traders are now pricing in a rate cut worth 136 basis points by the end of the year, 8 basis points more than Tuesday.
Concerns about inflation reignited in the UK after private companies reported their costs rose by the sharpest in five months, due in part to disruptions caused by shipping delays in the Red Sea. UK 10-year gold yields rose above 4% for the first time since mid-December, and the pound rose 0.5%.
The yen rose 0.6% as investors judged that Japanese policymakers were preparing to end negative interest rates early. Following Tuesday's Bank of Japan meeting, the swap market is increasingly betting on a 25 basis point interest rate hike in April.
Elsewhere, industrial metals prices rose after China signaled plans to stimulate the economy by cutting bank reserve requirements. This should allow Chinese banks to step up lending and buying government bonds. This news also supported Brent crude oil near $80 per barrel.
Corporate highlights
-
AT&T stock fell after the carrier predicted lower-than-expected profits and prompted an increase in capital spending.
-
DuPont de Nemours fell as sales forecasts fell short of analysts' expectations due to weak demand from China.
-
Shares of Infineon and STMicro fell after Texas Instruments reported disappointing quarterly forecasts, suggesting continued weakness in demand for industrial and automotive electronic components.
-
Shares in Siemens Energy AG rose after Germany's renewable energy sector performed well across the board in the first quarter.
-
Puma SE stock fell after the sportswear brand reported preliminary fourth-quarter sales that were lower than analysts expected.
-
U.S.-listed Chinese stocks including Alibaba Group Holding Ltd., Baidu Inc. and Jingtocom Ltd. rose in pre-market trading after the Chinese government said it would step up economic stimulus.
-
eBay plans to reduce its current workforce by about 1,000 roles, or an estimated 9% of its full-time workforce.
This week's main events:
-
Canadian interest rate decision Wednesday
-
Eurozone S&P Global Services and Manufacturing PMI, Wednesday
-
US S&P Global Services and Manufacturing PMI, Wednesday
-
Eurozone ECB interest rate decision Thursday
-
Germany IFO Business Environment Thursday
-
US GDP, new unemployment claims, durable goods, wholesale inventories, new home sales, Thursday
-
Japan Tokyo CPI, Friday
-
US Personal Income and Expenditures, Friday
-
Bank of Japan issues minutes of policy meeting on Friday
The main movements in the market are:
stock
-
As of 8:15 a.m. New York time, S&P 500 futures were up 0.6%.
-
Nasdaq 100 futures rose 0.9%
-
Dow Jones Industrial Average futures rose 0.4%.
-
Stoxx European 600 rose 1%
-
MSCI World Index rose 0.4%
currency
-
The Bloomberg Dollar Spot Index fell 0.5%.
-
The euro rose 0.5% to $1.0906.
-
Sterling rose 0.5% to $1.2750.
-
The Japanese yen rose 0.9% to 147.06 yen to the dollar.
cryptocurrency
-
Bitcoin rose 2.1% to $40,022
-
Ether rose 1.4% to $2,233.05
bond
-
The 10-year Treasury yield fell 2 basis points to 4.11%.
-
Germany's 10-year bond yield fell 2 basis points to 2.33%.
-
The UK 10-year bond yield rose 2 basis points to 4.00%.
merchandise
-
West Texas Intermediate crude rose 0.5% to $74.72 per barrel.
-
Spot gold rose 0.2% to $2,034.08 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Masaki Kondo and Winnie Hsu.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
