(Bloomberg) — U.S. equity futures advanced along with stocks in Europe as traders evaluated the resilience of the global recovery to a record spike in coronavirus cases.
Contracts on the S&P 500 and Nasdaq 100 rose following the S&P 500’s 69th record close this year. The Stoxx Europe 600 index nudged closer to last month’s record high, with utilities leading the advance as all industry sectors gained. The U.S. 10-year Treasury yield dipped and the dollar slipped. Oil surged to a one-month peak, while iron ore futures extended a decline after data showed softening Chinese steel output.
A tidal wave of omicron infections took global Covid-19 cases to a daily all-time high on Monday. The surge has disrupted global reopening and could squeeze hospitals. At the same time, investors are taking comfort from studies suggesting omicron, while highly contagious, causes less severe illness.
Global shares are on course for a third year of double-digit returns, powered by the U.S. surge. Analysts remain bullish on earnings forecasts even amid coronavirus waves and a shift by some key central banks toward tighter monetary policy to fight high inflation. Concerns remain that those variables could spur heightened volatility.
“Massive liquidity, negative real yields, and earnings growth” support the bull case for stocks, Patrick Armstrong, Plurimi Wealth’s chief investment officer, said on Bloomberg TV.“While those pillars remain in place, I think equities do move higher.”
Most Asian stocks rose, but a Hong Kong technology gauge missed out as tightening oversight of overseas share sales by Chinese authorities provided a reminder of Beijing’s regulatory zeal. Volumes were lower than average in some markets due to the holiday season.
The latest escalation in Beijing’s wider regulatory clampdown on private industry casts more doubt over the prospects for overseas initial public offerings, which had proceeded virtually unchecked for two decades.
Meanwhile, the People’s Bank of China — which on the weekend vowed more economic support — boosted a short-term liquidity injection.
In cryptocurrencies, Bitcoin gave up a recent advance to slide below the $50,000 level, suggesting investors in the riskiest corners of global markets are becoming more circumspect.
What to watch this week:
- U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.3% as of 8:47 a.m. New York time
- Futures on the Nasdaq 100 rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 rose 0.6%
- The MSCI World index rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was little changed at $1.1330
- The British pound rose 0.1% to $1.3459
- The Japanese yen was little changed at 114.77 per dollar
Bonds
- The yield on 10-year Treasuries declined one basis point to 1.46%
- Germany’s 10-year yield was little changed at -0.24%
Commodities
- West Texas Intermediate crude rose 1.1% to $76.41 a barrel
- Gold futures rose 0.6% to $1,820.30 an ounce
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