Stocks, Futures Rise as Dip Buyers Return: Markets Wrap

(Bloomberg) -- Stocks rallied as dip buyers returned, setting markets up to snap seven weeks of declines. Oil fell.

US futures extended gains after data showed inflation-adjusted consumer spending rose in April by the most in three months, indicating households were holding up in the face of persistent, yet moderating, price pressures. Didi Chuxing Inc. jumped in premarket trading after a Bloomberg News report that state-owned automaker China FAW Group is considering acquiring a significant stake in the ride-hailing company.

Consumer and technology sectors led gains in Europe’s Stoxx 600, while utilities and energy shared lagged after the UK government announced windfall tax plans on oil and gas companies on Thursday. BP Plc said it will look again at its plans in the country. 

Chinese tech shares jumped as two of the biggest Internet giants reported sales that topped estimates, lifting some of the gloom that had beset the sector following Covid-19 lockdowns and regulatory headwinds. 

The dollar and Treasury yields slipped. 

Global equity funds saw their biggest inflows in 10 weeks, led by US stocks, as cheaper valuations lured buyers after a steep selloff on recession fears. The selloff made valuations attractive and enticed investors back into a market still shadowed by worries about inflation and higher interest rates, China’s downbeat economic outlook and the war in Ukraine. 

“We may see a little bit more stability here because we have repriced the stocks so much already,” Anastasia Amoroso, iCapital chief investment strategist, said on Bloomberg Television. “In the next three to six months it’s still going to be a constrained market environment.”

Read: S&P 500 Believers Seeing Light Forming in the Valuation Tunnel

Among other notable moves in premarket trading, Gap Inc. shares sank as analysts said the retailer’s guidance cut was worse than expected, while Zscaler Inc. rose after the security software company reported results above expectations. 

Meanwhile, China-US tensions are once again being played out after direct comments from Secretary of State Antony Blinken aimed at Chinese President Xi Jinping. And in a fresh challenge to Beijing, the US and Taiwan are planning to announce negotiations to deepen economic ties.

Approaching day 100 of Russia’s war in Ukraine, the US may announce a new package of aid for Kyiv as soon as next week that would include long-range rocket systems and other advanced weapons. Boris Johnson urged further military support for Ukraine, including sending it more offensive weapons such as Multiple Launch Rocket Systems that can strike targets from much further away.

Russia’s efforts to avoid its first foreign default in a century are back in focus on Friday, when investors are supposed to receive about $100 million in interest on Russian debt. 

Some of the main moves in markets:

Stocks

• Futures on the S&P 500 rose 0.3% as of 8:35 a.m. New York time
• Futures on the Nasdaq 100 rose 0.6%
• Futures on the Dow Jones Industrial Average rose 0.1%
• The Stoxx Europe 600 rose 1%
• The MSCI World index rose 1.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.0719
• The British pound rose 0.2% to $1.2630
• The Japanese yen was little changed at 127.00 per dollar

Bonds

• The yield on 10-year Treasuries declined one basis point to 2.73%
• Germany’s 10-year yield declined four basis points to 0.96%
• Britain’s 10-year yield declined six basis points to 1.90%

Commodities

• West Texas Intermediate crude fell 0.8% to $113.14 a barrel
• Gold futures rose 0.5% to $1,862.80 an ounce

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.