(Bloomberg) — Stocks kicked off the new quarter on a bullish note, with electric-car makers Tesla Inc. and BYD Co. climbing on record quarterly sales.
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Tesla gained 6.3% in premarket trading, while BYD climbed in Hong Kong trading, leading shares of battery suppliers also higher. Contracts on the Nasdaq 100 climbed, after the tech index notched its best-ever first half of a year.
Banks and miners led gains in Europe, while Japan’s Topix index continued to reach highs last seen in the mid-1990s amid improved confidence among big manufacturers. Pakistan’s key stock gauge surged by the most in over three years after the nation clinched an initial $3 billion loan deal from the International Monetary Fund, easing default fears.
Investors are tempering expectations for stocks after an unexpectedly strong first half. While central banks have kept up their hawkish rhetoric, signs of moderating US inflation has fueled big gains across technology shares. Traders are looking to the upcoming earnings season and data such as Friday’s nonfarm payrolls for clues on the health of the economy. Markets in the US may be quieter ahead of the Independence Day holiday on Tuesday
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“Stocks have done well in the first half because a US recession didn’t happen,” said Nikolaos Panigirtzoglou, global market strategist at JPMorgan Chase & Co. Moreover, he added, the tech trade has turned into “a pain trade for institutional investors, causing them to capitulate. This first-half back drop creates vulnerabilities for the second half as it means if a US recession happens, there would be a rather abrupt market repricing.”
A report on Chinese manufacturing on Monday showed the economy is still struggling to rebound, while in Europe, Italy’s factories had their worst month since Covid-19 lockdowns in early 2020.
Also in focus this week will be US Treasury Secretary Janet Yellen’s trip to Beijing on July 6-9 as the world’s two largest economies look to mend ties after a spate of bilateral tensions.
The dollar edged higher Monday, with most major currencies confined to narrow ranges against the greenback. Oil fell, after Brent crude capped a string of four quarterly losses last week
Key events this week:
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US construction spending, ISM Manufacturing, light vehicle sales, Monday
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Australia interest rate decision, Tuesday
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US Independence Day national holiday. Financial markets closed, Tuesday
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China Caixin services and composite PMI, Wednesday
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Eurozone S&P Global Eurozone services PMI, PPI, Wednesday
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OPEC International Seminar, speakers including OPEC+ oil ministers, kicks off in Vienna, Wednesday
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FOMC issues minutes on June policy meeting, Wednesday
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New York Fed President John Williams in “fireside chat” at meeting of the Central Bank Research Association at the New York Fed, Wednesday
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US initial jobless claims, trade, ISM services, job openings, Thursday
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Dallas Fed President Lorie Logan speaks on a panel about the policy challenges for central banks at CEBRA meeting, Thursday
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US unemployment rate, nonfarm payrolls, Friday
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ECB’s Christine Lagarde addresses an event in France, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.2% as of 9:43 a.m. London time
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S&P 500 futures were little changed
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Nasdaq 100 futures rose 0.3%
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index rose 1.3%
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The MSCI Emerging Markets Index rose 1.4%
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.2% to $1.0885
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The Japanese yen fell 0.3% to 144.79 per dollar
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The offshore yuan was little changed at 7.2615 per dollar
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The British pound fell 0.3% to $1.2661
Cryptocurrencies
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Bitcoin rose 0.1% to $30,631.22
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Ether rose 2.2% to $1,960.16
Bonds
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The yield on 10-year Treasuries was little changed at 3.84%
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Germany’s 10-year yield declined one basis point to 2.38%
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Britain’s 10-year yield was little changed at 4.39%
Commodities
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Brent crude fell 0.8% to $74.80 a barrel
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Spot gold fell 0.3% to $1,912.69 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from John Viljoen and Tassia Sipahutar.
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