19th April 2021


Europe stocks rise as futures shift

European stocks rose and US equity futures ranged between red and green as the momentum of corporate earnings and the global economic recovery stoked investor sentiment. Treasury yields fell.

The Stoxx Europe 600 Index opened higher after a seventh consecutive week of gains. Nasdaq 100 futures received a boost thanks to easing of Treasury yields, while S&P 500 contracts held steady after the US indicator posted a fourth week of advances towards its highest point. Top-tier companies that reported later Monday include The Coca-Cola Company, IBM, and United Airlines Holdings Inc.

Chinese stocks fared better amid concerns about the health of China's state-owned Huarong Asset Management Co., a struggling debt manager. China's financial regulator said on Friday that Huarong had ample liquidity, the first official comment since the company missed a deadline to report earnings. Diminishing contagion fears fueled a rally in Huarong bonds.

Strong economic data from China and the US last week helped propel the MSCI All-Country World Index to another record despite concerns surrounding the spread of Covid-19 variants. New infections in the past week exceeded 5.2 million, the most since the pandemic began.

The risk of another disrupting spike in borrowing costs has also diminished, as bond yields have retreated from recent highs. This week, traders will be looking for further confirmation of the private sector's recovery from the pandemic as earnings season accelerates.

"Our current view is that if short-term interest rates remain low over the medium term and our expectation that earnings will continue to rise, it is unlikely that rising long-term interest rates will cause the market to fall. of values". Russel Chesler, head of investment and capital markets at VanEck Australia, said in a note.