Stocks Bounce as Oil Caps Mideast-Driven Gains: Markets Wrap
(Bloomberg) — Stocks rebounded from a brief geopolitical risk-off spell as oil contained gains after the US concluded a second day of strikes on Iran.
S&P 500 futures rose 0.3%. Brent crude fell 1.5% to below $77 a barrel, a day after posting its biggest advance since May. Chipmakers in Asia and Europe rallied as SK Hynix Inc. drew strong demand for its offering of American depositary receipts. The Stoxx 600 bounced back from its biggest daily selloff since March. A disappointing trial for a heart disease drug sent AstraZeneca 9.4% lower in London.
The calmer mood in markets comes despite an escalation of violence in the Middle East that is threatening efforts to reach a permanent US-Iran peace deal. The US military hit about 90 Iranian targets Wednesday to degrade Tehran’s ability to attack commercial shipping in the Strait of Hormuz.
Traders say that while the tensions reflect the fragile nature of the truce between the sides, neither government would want a full-scale return to war and that the parties would likely return to negotiations.
“This is the new status quo; it’s an uneasy equilibrium, but an equilibrium nonetheless,” said Geoff Yu, a senior macro strategist at BNY. “You just need to factor in the volatility in your asset allocation.”
Global bonds were modestly higher on Thursday, putting an end to the previous session’s selloff. The yield on 10-year Treasuries eased one basis point to 4.56%. The dollar was little changed.
Minutes of the Federal Reserve’s June 16-17 meeting, released Wednesday, showed that a few committee members saw a case for a rate increase, though they ultimately supported the decision to make no change.
“Our bias is that higher energy prices will provide fuel for the Fed hawks and keep the dollar supported on dips, particularly against the low yielders,” wrote Chris Turner, head of foreign-exchange strategy at ING Bank NV.
Corporate News:
SK Hynix Inc.’s US listing is more than seven times oversubscribed, according to people familiar with the matter, as the South Korean memory chipmaker prepares to price its offering Thursday. AstraZeneca and Ionis Pharmaceuticals Inc.’s gene silencer drug Wainua failed to help prevent heart problems in patients with a rare and potentially fatal disease of the organ. AstraZeneca’s shares slumped. Porsche AG deliveries slumped 16% in the first half, dragged down by weak demand in its biggest market of North America and a decline of nearly a third in China, adding to the gloom enveloping Germany’s autos sector. Deutz AG agreed to buy military vehicle maker Flensburger Fahrzeugbau Gesellschaft mbH for €1.6 billion ($1.8 billion), expanding further into the defense sector to benefit from Europe’s rearmament drive. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.4% as of 9:25 a.m. London time S&P 500 futures rose 0.3% Nasdaq 100 futures rose 0.8% Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1435 The Japanese yen rose 0.2% to 162.32 per dollar The offshore yuan rose 0.1% to 6.7976 per dollar The British pound rose 0.2% to $1.3415 Cryptocurrencies
Bitcoin rose 1.5% to $62,960.68 Ether rose 1.1% to $1,755.03 Bonds
The yield on 10-year Treasuries declined one basis point to 4.57% Germany’s 10-year yield was little changed at 3.09% Britain’s 10-year yield declined five basis points to 4.92% Commodities
Brent crude fell 1.5% to $76.87 a barrel Spot gold rose 0.9% to $4,114.77 an ounce This story was produced with the assistance of Bloomberg Automation.
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