Investors await a fresh round of corporate earnings with global shares sitting at record highs

By: |
April 19, 2021 5:25 PM

The risk of another destabilizing increase in borrowing costs has also subsided, as bond yields have pulled back from recent highs.

U.S. equity, U.S. Futures, global shares, Investors, stocks, interest ratesTraders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace.

Bloomberg: U.S. equity futures slipped while European stocks held steady on Monday as investors awaited a fresh round of corporate earnings with global shares sitting at record highs. The dollar slid.

S&P 500 Index contracts dropped modestly from a record chalked up last week as earnings season continued, with IBM and United Airlines Holdings Inc. due to report. Shares in the Coca-Cola Company rose in pre-market trading after comparable earnings per share beat analyst estimates. In Europe, the Stoxx 600 Index pared an earlier advance to trade little changed.

Chinese stocks outperformed amid easing concerns about the health of state enterprise China Huarong Asset Management Co., a distressed-debt manager. China’s financial regulator on Friday said Huarong had ample liquidity, the first official comments since the company missed a deadline to report earnings. Ebbing fears of contagion drove a rally in Huarong bonds.

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

The risk of another destabilizing increase in borrowing costs has also subsided, as bond yields have pulled back from recent highs. This week traders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace.

“Our current view is that with short-term interest rates set to remain low for the medium term and our expectation that earnings will continue to increase, it is unlikely that the increase in long-term interest rates will trigger an equity market fall,” Russel Chesler, head of investments and capital markets at VanEck Australia, said in a note.

Elsewhere, Bitcoin pared losses after tumbling the most since February over the weekend.

Here are some key events to watch this week:

  • Apple’s first product unveiling of the year on Tuesday.
  • Reserve Bank of Australia releases minutes of its policy meeting on Tuesday.
  • EIA crude oil inventory report on Wednesday.
  • European Central Bank rate decision and President Christine Lagarde briefing on Thursday.
  • U.S. releases manufacturing and services purchasing managers indexes Friday.

These are some of the main moves in financial markets:

Stocks

Futures on the S&P 500 Index declined 0.2% as of 7:03 a.m. New York time.
The Stoxx Europe 600 Index was little changed.
The MSCI Asia Pacific Index rose 0.3%.
The MSCI Emerging Market Index increased 0.2%.

Currencies

The Bloomberg Dollar Spot Index decreased 0.5%.
The euro gained 0.5% to $1.2048.
The British pound jumped 0.6% to $1.3919.
The onshore yuan strengthened 0.2% to 6.506 per dollar.
The Japanese yen strengthened 0.6% to 108.14 per dollar.

Bonds

The yield on 10-year Treasuries sank one basis point to 1.57%.
The yield on two-year Treasuries decreased less than one basis point to 0.16%.
Germany’s 10-year yield jumped two basis points to -0.25%.
Britain’s 10-year yield declined one basis point to 0.757%.
Japan’s 10-year yield dipped one basis point to 0.087%.

Commodities

West Texas Intermediate crude decreased 0.2% to $63 a barrel.
Brent crude dipped 0.2% to $66.61 a barrel.
Gold strengthened 0.6% to $1,787.93 an ounce.

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