European stocks and US futures rise as wave of earnings continues

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European stocks rose on Tuesday after the oil price spike and strong corporate updates led Wall Street to close at a record high in Monday’s session.

The region-wide Stoxx 600 stock index rose 0.5% in the early afternoon, while London’s FTSE 100 climbed 0.6%.

The moves came after the S&P 500 blue-chip U.S. equity index ended the previous day up 0.5%, fueled by cyclical consumer and energy companies, carrying its gains since the start of the year. year at 22%. Elon Musk’s Tesla, which became the first automaker to be valued at $ 1 billion after rental group Hertz said it ordered 100,000 of its electric vehicles, helped fuel the rally.

At the same time, U.S. oil prices topped $ 85 a barrel for the first time in seven years on Monday, as traders bet crude supplies would not keep pace with global demand, against the backdrop of ‘a growing energy crisis that has also propelled natural gas prices. toward the sky. The West Texas Intermediate, the benchmark US oil index, rose 0.3% to $ 84.03 per barrel on Tuesday.

Larry Fink said on Tuesday it was highly likely that oil would hit $ 100 a barrel, according to a Reuters report. The CEO of BlackRock, the world’s largest asset manager, was speaking at the Future Investment Initiative conference in Saudi Arabia.

Futures markets reported that the S&P 500 would rise 0.4% in the New York morning on Tuesday, while the technology-focused Nasdaq 100 index would gain 0.6%.

More than 300 companies listed on the S&P 500 will publish earnings reports in the next fortnight, constituting 59% of the index by market value, according to Credit Suisse analysis. Among these companies are some of the biggest tech companies in the world, including Apple and Microsoft.

Facebook shares rose 1.3% in pre-market trading on Tuesday after releasing third-quarter numbers the previous afternoon, reporting sales of $ 29 billion – just below the forecast for the consensus – and net income of $ 9.19 billion. Chief Executive Mark Zuckerberg explained that the social media group will now prioritize younger users after leaked documents showed its popularity was declining among those under 30.

In Asia, the Hong Kong Hang Seng stock index closed 0.4% lower on Tuesday – softened by the drop in real estate stocks as it emerged that Chinese developer Modern Land had missed a payment on a bond in dollars worth $ 250 million, in the latest signs of unrest in China’s real estate sector.

Real estate has long been the growth engine of the country’s economy, but in recent weeks the sector has been hit by government restrictions on speculation and a liquidity crunch at heavily indebted Evergrande which narrowly avoided a potential payment default last week.

Elsewhere in government debt markets, the yield on the 10-year US Treasury bill was flat at 1.62 percent. The yield on the UK gilt equivalent fell 0.03 percentage point to 1.11 percent. Bond yields move in the opposite direction to their prices.

Traders around the world are ready to receive announcements of tightening monetary policy and scaling back bond buying programs in the era of the pandemic, as governments respond to lingering inflationary pressures. The European Central Bank is due to meet on Thursday, while the US Federal Reserve and the Bank of England will meet next week.

In foreign currencies, the Turkish lira strengthened against the US dollar at 9.45 TL after hitting new lows on Monday, as President Recep Tayyip Erdogan backed down from a threat to expel 10 Western ambassadors. The pound has lost about a quarter of its value since early January.

What else to watch out for in the markets today

Energy: EU energy ministers meet in Luxembourg to discuss rising energy prices. Soaring fuel prices prompted the European Energy Commissioner to propose a reform of the gas market. Newly elected Norwegian Prime Minister Jonas Gahr Store told the FT that his country is helping in the current crisis and is also looking for ways to be part of the EU’s transition to a carbon neutral economy.

EU: The European Central Bank will publish its quarterly survey of bank lending in the euro area, which provides information on lending conditions in the euro area. The supply of bank loans to eurozone businesses stabilized after most containment measures were lifted in the second quarter, but disruptions in the global supply chain led to a slowdown in activity of companies in October.

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