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Stocks rally normally, futures fall after China diverges: Markets over


(Bloomberg) – Shares in Europe rose and US futures fell as a drop in Chinese shares weighed on sentiment as investors awaited the next round of earnings from some big companies. best of the world. Treasury yields fell and the dollar rose.

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The Stoxx Europe 600 Index rose about 0.4% after gaining 1.4% at the open, with disappointing data adding to fears the eurozone is headed for a recession. Prosus NV fell more than 11% as Chinese technology shares tumbled, while energy and resources fundamentals balanced the benchmark amid falling crude oil and gas prices.

This week’s earnings from megacap tech companies – one of the main profit growth engines for the S&P 500 – could provide more clues about the resilience of the US economy and the trajectory of stocks. . The five largest technology companies by revenue – Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. — is expected to report its biggest drop in earnings in three years, data compiled by Bloomberg shows.

Laura Cooper, senior investment strategist at BlackRock International Ltd., said: “Obviously demand is slowing but so far we see the pockets of technology like software, cloud computing are still decent. stable,” Laura Cooper, senior investment strategist at BlackRock International Ltd., said on Bloomberg TV. “We will be watching for any signs of cracking that could affect some of these earnings expectations.”

A gauge of dollar strength rose in volatile trading that saw sharp yen swings amid Japanese authorities signs of intervention for the second time in two sessions. The pound rallied against the greenback and the post-coin rallied after Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, bringing former prime minister Rishi Sunak closer to becoming the leader of the UK’s ruling Conservative Party. next prime minister.

China’s yuan and its stocks in Hong Kong fell to their lowest levels since the 2008 global financial crisis even as economic growth data beat estimates. The local yuan depreciated as much as 0.4%, while the Hang Seng China Enterprise Index, a gauge of Hong Kong-listed Chinese stocks, fell more than 5% as investors reacted to the risks posed by President Xi Jinping’s move to line up his leadership. with loyal people. US-listed Chinese stocks tumbled in pre-market trading.

“Market sentiment is likely to remain cautious in the near-term due to concerns about shifting focus to more state control than it should be,” said Xiaojia Zhi, chief China economist at Credit Agricole CIB. market-oriented approach of the new leadership team”. “The path out of zero-Covid remains unclear.”

Chinese economic data lagged last week and released on Monday showed a mixed recovery, with unemployment rising and retail sales weakening although growth remained buoyant. However, Mr. Xi’s Covid-zero campaign looks set to continue to hit the economy and there has been speculation that his goal of “common prosperity” could even lead to wealth and inheritance taxes.

More broadly, markets have taken cues from falling US bond yields as investors look beyond the Federal Reserve’s current monetary tightening to the next phase, possibly see rate hikes slow or pause.

Monday’s Purchasing Managers’ Index showed the eurozone’s top two economies deteriorated in October, with recession in Germany intensifying and France failing to grow for the first time in 19 months. . The European Central Bank is gearing up for another huge rate hike this week as attention increasingly turns to how high it will eventually push.

This week’s main events:

  • Earnings due this week include: Apple, Microsoft, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Alphabet, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Coca-Cola, HSBC, Intel, McDonald’s, Mercedes -Benz, Merck, Samsung Electronics, Shell, UBS, UPS, Vale, Visa, Volkswagen

  • PMI for the US, Monday

  • American Conference Board Consumer Confidence, Tuesday

  • Bank of Canada Rate Decision, Wednesday

  • ECB Rate Decision, Thursday

  • US GDP, durable goods orders, initial jobless claims, Thursday

  • Policy Decision of the Bank of Japan, Friday

  • US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday

Some key moves in the market:

Inventory

  • Stoxx Europe 600 rose 0.4% at 9:37 a.m. London time

  • S&P 500 futures fell 0.6%

  • Nasdaq 100 futures fell 0.7%

  • Futures on the Dow Jones Industrial Average fell 0.5%

  • The MSCI Asia Pacific Index fell 1.1%

  • MSCI Emerging Markets Index down 2%

Currency

  • The Bloomberg Dollar Spot Index is up 0.6%.

  • The euro fell 0.4% to $0.9824

  • Japanese yen fell 1.2% to 149.35 a dollar

  • The offshore yuan fell 0.9% to 7.2965 per dollar

  • British Pound was little changed at $1.1311

Electronic money

  • Bitcoin drops 0.9% to $19,322.09

  • Ether rose 0.4% to 1,335.89 USD

Bonds

  • Yields on 10-year Treasuries fell two basis points to 4.20%

  • Germany’s 10-year yield was little changed at 2.41%

  • UK 10-year yield drops 12 basis points to 3.93%

Goods

  • Brent crude fell 2% to $91.66 per barrel

  • Spot gold fell 0.7% to $1,646.55 an ounce

–With support from Charlotte Yang and Brett Miller.

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