Stocks Gain Ahead of Big Week for Rates, Earnings: Markets Wrap

(Bloomberg) — European stocks gained after a strong Asian session, signaling rising optimism ahead of major central bank decisions and big tech earnings due this week.

Most Read from Bloomberg

• Harris’ Running-Mate Search Zeroes In on Three Top Contenders

• Venezuela’s Opposition Disputes Claim of Maduro Election Victory

• Apple’s AI Features Rollout Will Miss Upcoming iPhone Software Overhaul

• Trump’s Campaign Against Harris Is Like Him: Old and Tired

• Venezuela’s Silence on Election Results Draws Global Concern

The Euro Stoxx 600 rose 0.2% on Monday in a session marked by gains across sectors. Benchmark US futures contracts also strengthened, while Treasury yields declined three basis points to 4.16%. The dollar edged higher.

Monetary policy decisions in the US, Japan and the UK will be taking center stage in the coming days. Investors will be looking for answers about the near-term path of interest rates, after markets had been upended by conflicting signals from key economies.

Also in focus this week are earnings including Apple Inc, Amazon.com Inc and Microsoft Corp. following a stock rout that was sparked by an underwhelming start to the reporting season for tech megacap companies.

“If it goes well for the remaining members of the Magnificent Seven, it could stop this movement toward a correction that we just had,” said Jacques Henry, head of cross-asset research at Silex in Geneva. “It could turn out to be an interesting entry point for investors.”

Among single stocks in Europe, Koninklijke Philips NV surged in Amsterdam on a second-quarter earnings beat, while Heineken NV dropped the most in a year after an €874 million ($949 million) impairment.

Spurred by wagers on monetary tightening in Japan, the yen advanced against most of its Group-of-10 peers Monday. The long-beleaguered currency has clawed back some of its losses in recent sessions and is now on course to post its best monthly performance versus the dollar this year.

The Bank of Japan is expected to release details of plans to cut monthly bond purchases at the conclusion of its two-day policy meeting on Wednesday, while most economists also see the possibility of a rate hike.

Hours after the conclusion of the BOJ meeting, the US Federal Reserve is likely to signal its plans to cut in September, according to economists surveyed by Bloomberg. Money markets are fully pricing a September move, with a chance of two more by year-end, according to swaps data compiled by Bloomberg.

“While the July FOMC meeting is likely too soon to initiate the cut, it is not too early to begin preparations for a rate reduction in September,” wrote Stephen Gallagher, an economist at Societe Generale.

As for the Bank of England, most economists expect it to reduce rates for the first time on Aug. 1 since the start of the pandemic, although a close vote is anticipated.

Elsewhere, Bitcoin rose to the highest in six weeks after Donald Trump said he would make the US the world’s “crypto capital” if he returns to the White House. The move spurred gains in cryptocurrency-linked companies in US premarket trading.

Key events this week:

• McDonald’s, Monday

• Microsoft earnings, Tuesday

• European inflation and growth data, Tuesday

• Australia CPI, Wednesday

• Bank of Japan policy decision, Wednesday

• Meta Platforms earnings, Wednesday

• Fed interest rate decision and news conference by Chair Jerome Powell, Wednesday

• Bank of England sets official interest rate, Thursday

• Amazon, Apple earnings, Thursday

• US tariffs are due to increase on an array of Chinese imports on Thursday, including EVs, batteries, chips and medical products

• South Korea CPI, Friday

• US employment, factory orders, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 9:57 a.m. London time

• S&P 500 futures rose 0.2%

• Nasdaq 100 futures rose 0.3%

• Futures on the Dow Jones Industrial Average rose 0.2%

• The MSCI Asia Pacific Index rose 1.1%

• The MSCI Emerging Markets Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.2% to $1.0832

• The Japanese yen was little changed at 153.74 per dollar

• The offshore yuan fell 0.1% to 7.2708 per dollar

• The British pound fell 0.4% to $1.2814

Cryptocurrencies

• Bitcoin rose 2.1% to $69,445.51

• Ether rose 3.4% to $3,371.45

Bonds

• The yield on 10-year Treasuries declined three basis points to 4.16%

• Germany’s 10-year yield declined four basis points to 2.36%

• Britain’s 10-year yield declined six basis points to 4.04%

Commodities

• Brent crude was little changed

• Spot gold rose 0.1% to $2,390.13 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Subrat Patnaik and Catherine Bosley.

Most Read from Bloomberg Businessweek

• The Miseducation of America’s Nurse Practitioners

• Joe Rogan Invaded Austin and Became Comedy’s New Kingmaker

• Disney Bets on Deadpool, Wolverine and Dirty Jokes to Save Marvel

• ‘Dancing With Death’: What It’s Like to Dismantle a Ship

• The $12,000 Harvard Class Celebrities Are Fighting to Get Into

©2024 Bloomberg L.P.