Markets

European and Asian markets rise ahead of US earnings season

Euro Stoxx 50 Index up 0.1% - FTSE 100 up 0.2% - SandP 500 futures up 0.1%

European and Asian markets rise ahead of US earnings season. Photograph: iStock

Tue Jul 11 2017 - 08:58

European stocks followed Asian markets higher as investors awaited the US earnings season, a potential catalyst for further gains.

US equity index futures also rose, tracking strength in Sydney, Tokyo and Seoul, though volume in those three markets was below average.

An index of Chinese companies trading in Hong Kong climbed the most in nearly four months. The kiwi and yen were the weakest major currencies, while gold and silver also declined.

Bonds softened, extending a slump triggered by more hawkish rhetoric from central banks. Oil rose toward $45 a barrel.

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With global equities remaining near all-time highs, scrutiny turns to corporate results. PepsiCo, JPMorgan Chase, Citigroup and Wells Fargo are reporting this week.

Tim Moe, chief Asia-Pacific strategist at Goldman Sachs (Asia) LLC, told Bloomberg TV that his company expects US earnings to be slightly above expectations. "We're looking at about 9 per cent annual earnings growth in the US," he said.

Bob Doll, senior portfolio manager and chief equity strategist at Nuveen Asset Management, said improving corporate earnings are the key ingredient to sustain the equity bull market.

“With economic growth prospects looking solid, we think earnings can climb,” he said.

Investors will hear from US policy maker Lael Brainard on Tuesday in a speech focused on normalisation of central bank balance sheets, and Federal Reserve chair Janet Yellen's semi-annual monetary policy report to Congress is on Wednesday. The Bank of Canada announces its interest-rate decision tomorrow, with a hike expected by most analysts.

The Euro Stoxx 50 Index rose 0.1 per cent following a 0.4 per cent gain on Monday. The FTSE 100 jumped 0.2 per cent. SandP 500 futures were up 0.1 per cent.

Japan’s Topix Index climbed 0.7 per cent. Hong Kong’s Hang Seng Index strengthened 1.6 per cent, heading for its first back-to-back gain in three weeks.

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