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 0.2%. Brent crude fell 0.5% to $77.60 a barrel, a day after posting its biggest advance since May. Chipmakers in Asia, Europe and the US 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 as two days of oil-driven selldowns came to an end. The yield on two-year Treasuries eased two basis points to 4.20%. The dollar was little changed.
After Wednesday’s minutes of the Federal Reserve’s June meeting showed that some committee members saw a case for a rate increase, traders will now wait for next week’s US inflation data and Chair Kevin Warsh’s testimony to lawmakers for another steer on the path for interest rates. New York Fed President John Williams will take part in a moderated discussion later on Thursday.
“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 0.2% as of 10:32 a.m. London time S&P 500 futures rose 0.2% Nasdaq 100 futures rose 0.6% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index fell 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1425 The Japanese yen rose 0.1% to 162.42 per dollar The offshore yuan rose 0.1% to 6.7980 per dollar The British pound rose 0.2% to $1.3412 Cryptocurrencies
Bitcoin rose 1.4% to $62,900.17 Ether rose 1% to $1,753.2 Bonds
The yield on 10-year Treasuries was little changed at 4.58% Germany’s 10-year yield advanced two basis points to 3.11% Britain’s 10-year yield declined three basis points to 4.95% Commodities
Brent crude fell 0.5% to $77.64 a barrel Spot gold rose 0.7% to $4,107.64 an ounce This story was produced with the assistance of Bloomberg Automation.
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