U.S. Stock Futures Climb on Earnings, Geopolitics

EghtesadOnline: U.S. stock futures rose, extending gains a third day as investors took heart from a solid start to the earnings season and signs of improving relations between America and North Korea. The pound slumped on disappointing inflation data.

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18 April 2018

The U.S. gains followed sweeping increases across Asian equities, though shares in Europe fluctuated in the wake of a jump on Tuesday. Contracts for the S&P 500 got a boost when Morgan Stanley became the latest lender to post upbeat results. The dollar was steady as several major peers had a challenging day, with the Swiss franc deepening declines and Europe’s common currency briefly wobbling after euro-area inflation data was revised downward. It later recovered, but sterling dropped as U.K. price growth slowed to the weakest level in a year. Treasuries edged lower and European bonds were mixed, according to Bloomberg.

There’s once again no shortage of catalysts for investors across the globe, from corporate fundamentals and geopolitics to simmering trade tensions and growth concerns. For now the bulls appear to have the upper hand as the earnings season ramps up and the U.S. says it’s already started direct talks with North Korea. Separately, Russian leader Vladimir Putin was said to be seeking to dial down tensions with America.

Still, nickel surged to the highest in more than three years on the London Metal Exchange on worries that the metal used in stainless steel could be caught in the crossfire of any further sanctions against Russia. West Texas crude rallied amid the tensions and after a drop in U.S. inventories.

Earlier in Asia, Japanese shares outperformed amid gains across the region, boosted by a drop in the yen as President Donald Trump met Japanese Prime Minister Shinzo Abe. China’s 10-year bond yield tumbled after the People’s Bank of China cut the reserve-requirement ratio for banks, part of its efforts to support credit amid a crackdown on shadow lending. Lenders in the country advanced. But automakers fell after the government moved to allow foreign players to take full ownership of their local ventures.

Here’s what to watch out for this week:

Theresa May’s flagship Brexit bill returns to Parliament’s upper chamber on Wednesday.

The Federal Reserve on Wednesday will release its latest Beige Book economic report.

The Bank of Canada has a monetary policy decision.

Finance ministers and central bank chiefs from around the world gather for spring meetings at the IMF in Washington.

Here are the main moves in markets:

Stocks

The Stoxx Europe 600 Index dipped less than 0.05 percent as of 7:50 a.m. New York time.

Futures on the S&P 500 Index climbed 0.4 percent to the highest in four weeks.

The MSCI All-Country World Index advanced 0.2 percent to the highest in more than a month.

The U.K.’s FTSE 100 Index gained 0.9 percent to the highest in two months on the biggest rise in more than a week.

Germany’s DAX Index declined 0.1 percent.

The MSCI Emerging Market Index gained 0.6 percent, the biggest rise in more than a week.

The MSCI Asia Pacific Index gained 0.8 percent.

Currencies

The Bloomberg Dollar Spot Index increased 0.1 percent.

The euro gained 0.1 percent to $1.2385, the strongest in more than three weeks.

The British pound decreased 0.6 percent to $1.4208 on the biggest dip in three weeks.

The Japanese yen fell 0.2 percent to 107.22 per dollar.

Bonds

The yield on 10-year Treasuries increased one basis point to 2.84 percent, the highest in more than three weeks.

Germany’s 10-year yield gained one basis point to 0.52 percent.

Britain’s 10-year yield sank three basis points to 1.436 percent on the biggest tumble in three weeks.

Commodities

West Texas Intermediate crude advanced 1.5 percent to $67.52 a barrel, the highest in more than three years.

Copper gained 1.8 percent to $3.16 a pound, the highest in five weeks.

Gold increased 0.2 percent to $1,349.94 an ounce, the highest in a week.

LME nickel surged 4 percent to $14,780 per metric ton, the highest in more than three years on the biggest jump in almost six weeks.