European Stocks Advance With S&P 500 Futures, Dollar
Frankfurt (Jan 7) European stocks rose while equity-index futures and the dollar advanced before the release of minutes from the Federal Reserve’s last policy meeting. Treasuries declined with German bunds.
The Stoxx Europe 600 Index climbed 1.1 percent at 7:17 a.m. in New York, and Standard & Poor’s 500 Index futures increased 0.7 percent. Intercontinental Exchange Inc.’s U.S. Dollar Index jumped to the highest since December 2005. The yield on 10-year Treasuries rose four basis points to 1.98 percent. The euro slid to an eight-year low against the dollar after inflation slowed more than forecast. Brent crude traded near the lowest close since 2009 after briefly dipping below $50 a barrel.
Stocks gained after more than $1.6 trillion was erased from the value of global equities in 2015 and U.S. shares posted their worst start to a year since 2008. Oil’s decline is frustrating central bank efforts to stave off deflation as data today showed euro-area consumer prices retreated below zero for the first time since 2009. A private U.S. jobs report and Fed minutes may offer insight into the timing of the first interest-rate increase since 2006.
“The U.S. has clearly been ahead of the game,” Peter Dixon, global equities economist at Commerzbank AG in London, said by phone. “Growth is on a stronger footing. Oil has gone down but in some ways the shock is way overdone. I’d expect markets to recoup some of the ground they’ve lost in recent weeks.”
The S&P 500 has fallen 4.2 percent in the past five days, its longest losing streak since December 2013.
J.C. Penney Co. jumped 20 percent in early New York trading after reporting that same-store sales rose 3.7 percent during the nine-week holiday season.
Four shares advanced for every one that declined in the Stoxx 600, with trading volumes 22 percent higher than the 30-day average, data compiled by Bloomberg show. Energy shares led gains, with Total SA and Royal Dutch Shell Plc climbing at least 1.6 percent.
The MSCI Emerging Markets Index rose for the first time in five days, adding 0.5 percent, as benchmark gauges in Brazil, Poland and Thailand gained at least 1.4 percent. The Shanghai Composite Index added 0.7 percent. Markets were closed in Moscow for the Russian Orthodox Christmas holiday.
Shares in the Middle East rebounded, with the Dubai Financial Market Index climbing 4.4 percent and rallying from a three-week low. Abu Dhabi’s ADX General Index ended a three-day decline, rising 2.6 percent, and Saudi Arabia’s Tadawul All Share Index increased 0.9 percent.
Crude Fluctuates
Brent crude was little changed at $50.88 a barrel, paring an earlier drop to as low as $49.66 a barrel. West Texas Intermediate climbed 0.1 percent to $47.99 a barrel, near the lowest closing price since April 2009.
Gold fell for the first time in four days, dropping 0.5 percent to $1,212.42 an ounce. Sliver slid 1.3 percent and palladium declined 0.6 percent.
Copper dropped 0.5 percent, extending declines from a four-year low, while aluminum was close to the weakest in seven months on concern that oil’s slump is a sign of slowing economic growth.
The U.S. currency rose against 11 of its 16 major peers, climbing 0.6 percent to 119.14 yen, advancing from yesterday’s three-week low. The euro declined 0.6 percent to $1.1821 per euro, the weakest.
Greek notes fell, pushing three-year yields 41 basis points higher to 14.46 percent.
Consumer prices in the euro area dropped 0.2 percent in December, the European Union’s statistics office said. That’s the lowest rate since September 2009. Economists in a Bloomberg survey predicted a decline of 0.1 percent. Unemployment held at 11.5 percent in November, Eurostat said in a separate report.
Source: Bloomberg
