(Bloomberg) — Stocks in Europe edged higher on Wednesday along with U.S. equity-index futures as investors assessed the economic implications of the omicron coronavirus outbreak. Treasuries and the dollar were steady.
The Stoxx Europe 600 index nudged to within a whisker of another record, with retailers outperforming. The FTSE 100 Index climbed to its highest level since February 2020 as U.K. markets reopened after Christmas. Technology shares declined, following the sector’s retreat in the U.S. and Asia. Contracts on the S&P 500 and Nasdaq 100 rose after the rally in U.S. stocks paused on Tuesday. Volumes remained thin into the end of the year in some markets.
Investors are rounding out the year by booking some profits after a 17% jump in global equities. The coronavirus, Federal Reserve policy tightening and China’s outlook are among the key risks for 2022. Omicron fears are easing on growing evidence that the fast-spreading strain leads to milder symptoms, even as worldwide Covid-19 cases rose above 1 million for a second straight day.
“Although omicron cases in the U.S. and Europe amongst others, continue to surge, it has yet to make its presence felt negatively in economic data,” Jeffrey Halley, a senior market analyst at Oanda, said in a note. “With market activity much reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole.”
Crude oil held near a one-month high, partly on bets that the global recovery can ride out omicron. Iron ore futures in Singapore and China declined for a third day. Bitcoin stayed below $48,000 after a tumble that hinted at diminished ardor for the most speculative assets.
Shares slipped in Japan, technology stocks drove a retreat in Hong Kong and China slid. Sentiment in China is being sapped by Beijing’s tightening oversight of overseas share sales and economic risks from a property slowdown. Authorities are expected to add stimulus next year to steady expansion.
Read: China’s Stable Economy Clouded by Property and Export Outlook
In the latest U.S. data, the Richmond Fed’s manufacturing survey rose in December, beating estimates. Growth in U.S. home prices cooled modestly in October after soaring during the pandemic.
“We’re sober about potential headwinds that still could be coming, even the rest of this year, but early in 2022 — the Fed is going to be raising rates, that will change things for the markets,” Ann Miletti, head of active equity at Allspring Global Investments, said on Bloomberg Television. “We are also hopeful because as you look at a lot of the economic data, it remains strong.”
Elsewhere, Elon Musk continued to offload Tesla Inc. stock, selling just over $1 billion of shares.
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
- The Stoxx Europe 600 rose 0.2% as of 9:44 a.m. London time
- Futures on the S&P 500 rose 0.2%
- Futures on the Nasdaq 100 rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The MSCI Asia Pacific Index fell 0.4%
- The MSCI Emerging Markets Index fell 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.3% to $1.1279
- The Japanese yen fell 0.1% to 114.99 per dollar
- The offshore yuan was little changed at 6.3694 per dollar
- The British pound fell 0.1% to $1.3415
Bonds
- The yield on 10-year Treasuries was little changed at 1.49%
- Germany’s 10-year yield advanced one basis point to -0.23%
- Britain’s 10-year yield advanced four basis points to 0.97%
Commodities
- Brent crude was little changed
- Spot gold fell 0.2% to $1,803.41 an ounce
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
