June 14, 2024

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European stocks hit record on technology bets, ECB: Markets wrap

European stocks hit record on technology bets, ECB: Markets wrap

(Bloomberg) — European stocks rose to a new record high, supported by a continued rally in technology stocks and an expected interest rate cut from the European Central Bank on Thursday.

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While the European Stoxx 600 index added 0.7%, the technology sub-index rose as much as 2.6%, after significant gains achieved by giant technology companies on Wall Street. US stock futures also rose, signaling another all-time peak for the S&P 500. In pre-market trading in the US, Nvidia Corp advanced nearly 2%, after its market capitalization surpassed $3 trillion on Wednesday, which… The first computer chip company to reach this number. turn.

Other U.S. technology companies, including Micron Technology Inc., also rose. and Advanced Micro Devices Inc., in pre-market trading, while in Europe, ASML Holding NV and ASM International NV rose to new record highs.

“Behind a lot of the optimism we're seeing in the markets, technology continues to lead the pack,” said Matt Stuckey, a senior portfolio manager at Northwestern Mutual Wealth Management. “Earnings revisions favor technology and that shows in terms of the stock market leadership.”

Tech optimism coincides with growing confidence among investors that central banks across the developed world will be able to ease monetary policy this year. The European Central Bank is supposed to cut by 25 basis points on Thursday, after the Bank of Canada began its tapering cycle and hinted at further easing to come. Traders have also begun to price in more Fed easing this year.

“With the Bank of Canada cutting interest rates and expectations that the European Central Bank will do so, the momentum behind a coordinated global easing cycle is starting to gain some momentum,” Stuckey said.

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Bond yields rose across Europe ahead of the meeting, as traders await more guidance on the path for additional easing from European Central Bank President Christine Lagarde. Bets on further cuts from the European Central Bank have become more cautious in the wake of data showing stronger-than-expected economic growth, inflation and wage increases.

Treasury yields also rose after falling in the previous session, with markets almost fully pricing in two Fed rate cuts in 2024. While Wednesday's private payrolls reading showed corporate employment grew at the slowest pace since the start of 2024, the services sector expanded at the largest pace. Estimated in nine months. Key monthly jobs data on Friday is expected to show a rise in job creation in May after a surprisingly weak number in April.

Earlier in Asia, stocks rose for the first time in three days, with Indian stocks extending gains after Prime Minister Narendra Modi received crucial support from two key allies in his coalition. Taiwan Semiconductor Manufacturing Company shares rose as much as 7.4% to reach a new record high as the chip giant announced a share buyback.

In commodities, oil rose for a second session, while copper led the rise in industrial metal prices, while zinc and nickel also rose.

Main events this week:

  • Eurozone retail sales, European Central Bank interest rate decision, Thursday

  • US Initial Jobless Claims, Trade, Thursday

  • Chinese trade, foreign exchange reserves, Friday

  • Eurozone GDP, Friday

  • US Unemployment Rate, Nonfarm Payrolls Report, Friday

Some key movements in the markets:

Stores

  • The Stoxx Europe 600 Index was up 0.6% as of 10:04 AM London time

  • S&P 500 futures were little changed

  • Nasdaq 100 futures rose 0.1%.

  • Dow Jones Industrial Average futures were little changed

  • The MSCI Asia Pacific Stock Index rose 0.8%.

  • MSCI Emerging Markets Index rises 0.9%

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Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • There was little change in the euro at $1.0878

  • There was little change in the Japanese yen at 156.18 to the dollar

  • There was little change in the yuan in external transactions at 7.2614 to the dollar

  • There was little change in the pound sterling at $1.2789

Digital currencies

  • Bitcoin fell 0.4% to $70,952.88

  • Ethereum fell 0.4% to $3,848.74

Bonds

  • The yield on 10-year Treasury bonds rose by three basis points to 4.30%.

  • The yield on 10-year German bonds rose two basis points to 2.53%.

  • There was little change in the yield on British 10-year bonds at 4.18%.

Goods

  • Brent crude rose 0.5 percent to $78.78 a barrel

  • Spot gold rose 0.4 percent to $2,363.77 per ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Matthew Burgess and Toby Alder.

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