American equity futures climbed alongside European shares on Thursday in the wake of the signing of the U.S.-China trade deal, expectations for which had driven global stocks to record highs. Bonds fluctuated in a narrow range and the dollar was steady.
Contracts for all three main American gauges pointed to more gains after Wall Street hit new records a day earlier. Those on the Nasdaq 100 set the pace after tech bellwether Taiwan Semiconductor Manufacturing Co. projected quarterly revenue well above analysts’ estimates. The Stoxx Europe 600 Index tracked the move, though carmakers drifted even as data showed record sales in the region in December. Asian equities were mixed. Treasuries ticked lower after two days rising. West Texas crude hovered around $58 a barrel.
The formal signing of a phase one deal between the world’s two biggest economies has put the trade war on hold as far as many investors are concerned. Assuming the detente lasts, traders will be seeking fresh catalysts, most likely in economic data and the ramp-up of earnings season. Morgan Stanley is among the names reporting before the open in New York.
“Given the amount of speculation by the markets and commentary by officials ahead of Wednesday’s signing, it is unsurprising markets have not rallied too strongly upon final signing,” said Hannah Anderson, a strategist at JPMorgan Asset Management. “Markets will likely continue to price in an elevated risk premium, which could be a source of volatility throughout 2020.”
Elsewhere, the ruble fluctuated in the wake of Russian President Vladimir Putin’s call for sweeping constitutional changes and subsequent replacement of his long-serving prime minister. Soybeans slumped overnight after China signaled purchases would be based on demand, rather than a pre-set amount.
Here are some events to watch for this week:
Turkey and South Africa both set interest rates on Thursday.Earnings are due from Morgan Stanley and Bank of New York Mellon Corp. on Thursday.China GDP, along with key monthly data for December, come on Friday.A final reading on the euro-zone’s December inflation is also due on Friday.
There are some of the main moves in markets:
Futures on the S&P 500 Index increased 0.3% as of 8:40 a.m. London time.The Stoxx Europe 600 Index increased 0.3%.The MSCI Asia Pacific Index advanced 0.2%.
The Bloomberg Dollar Spot Index was little changed.The euro climbed 0.1% to $1.1161.The British pound gained 0.2% to $1.3062.The Japanese yen dipped 0.1% to 110.03 per dollar.
The yield on 10-year Treasuries gained one basis point to 1.80%.Germany’s 10-year yield fell less than one basis point to -0.20%.Britain’s 10-year yield gained one basis point to 0.659%.
West Texas Intermediate crude gained 0.6% to $58.17 a barrel.Gold fell 0.1% to $1,553.93 an ounce.
–With assistance from Nancy Moran, Cormac Mullen and Adam Haigh.
To contact the reporter on this story: Sam Potter in London at email@example.com
To contact the editors responsible for this story: Sam Potter at firstname.lastname@example.org, Yakob Peterseil
For more articles like this, please visit us at bloomberg.com
©2020 Bloomberg L.P.