Asian stocks rise after US gains, support from China: Markets mixed

(Bloomberg) — Wall Street was poised to open near record highs on Monday as investors ignored the inflationary implications of the commodities rally and bet that interest rate cuts will remain in play this year.

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Nasdaq 100 contracts rose 0.3% and S&P 500 contracts rose 0.2%. One of the biggest features this week is Wednesday’s earnings release from artificial intelligence leader Nvidia Corp., which drove a large portion of the S&P 500’s 2024 gains and represents 5% of its market value. Nvidia shares rose about 1.5% in premarket trading, while other chipmakers including Micron Technology Inc. also advanced.

In Europe, stocks were boosted by record copper and gold prices. The Stoxx Europe 600 index hovered near a record high, led by mining stocks including Glencore Plc and KGHM SA.

Copper hit its highest level ever, sending futures on the London Metal Exchange above $11,000 for the first time. Gold surpassed its previous peak set in April when the death of Iranian President Ebrahim Raisi in a helicopter raised concerns about renewed tensions in the Middle East, offering a boost to the safe-haven metal. Oil prices have remained stable, having risen 10% so far this year.

With the Bloomberg commodities index rising more than 4% this month, there are fears of a further rise in inflation that could take the shine off stocks and bonds. Many investors remain confident, however, that price pressures will continue to ease, allowing the Federal Reserve, European Central Bank and others to cut rates in the coming months.

“Fundamentally, investors are not worried about the health of the economy,” said Gene Salerno, chief investment officer at SG Kleinwort Hambros Bank Ltd. “I am not too worried about the recovery in commodities as it is just one component of inflation and we are seeing other aspects of inflation, such as froth in labor markets, begin to abate.”

The timing of the Fed’s likely move to rate cuts has shaped trading in financial markets in recent days. The blue-chip Dow Jones Industrial Average closed above 40,000 for the first time on Friday, while the S&P 500 hit a series of record highs. This prompted Morgan Stanley strategist Michael Wilson – a prominent Wall Street bear – to turn positive on the stock market and predict further gains.

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Bloomberg’s dollar index traded flat, having fallen last week as data showed U.S. inflation eased more last month than forecast. Ten-year Treasury yields are more than 20 basis points below late-April levels.

However, several policymakers have urged caution regarding rate cuts, with the ECB’s Martins Kazaks being the latest to warn against hasty cuts following the first measure in June. Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin said last week that it may take a while for inflation to slow to the target of two%.

Investors will be watching for more speeches from Fed officials this week, including from Governor Christopher Waller, who will speak specifically about the US economy and monetary policy.

Some important events this week:

• BOE Deputy Governor Ben Broadbent Speaks on Monetary Policy Broadcast, Monday

• Chile’s GDP, Monday

• Reserve Bank of Australia issues minutes of May policy meeting, Tuesday

• Canadian CPI, Tuesday

• Fed Governor Christopher Waller talks about the U.S. economy and monetary policy, Tuesday

• BOE Governor Andrew Bailey Speaks Tuesday

• New Zealand rate decision Wednesday

• Indonesia rate decision Wednesday

• South African CPI Wednesday

• UK CPI Wednesday

• FOMC Minutes of Policy Meeting April 30-May 1, Wednesday

• Singapore CPI, GDP, Thursday

• South Korea rate decision Thursday

• India S&P Global Manufacturing & Services PMI, Thursday

• Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, consumer confidence, Thursday

• US new home sales, initial unemployment claims, Thursday

• Chile rate decision, Thursday

• Japan CPI Friday

• German GDP, Friday

• Malaysia CPI Friday

• US Durable Goods, University of Michigan Consumer Sentiment, Friday

Some of the main movements in the markets:

Actions

• The Stoxx Europe 600 was up 0.2% at 1:08 p.m. London time

• S&P 500 futures rose 0.2%

• Nasdaq 100 futures rose 0.3%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia-Pacific index rose 0.3%

• The MSCI Emerging Markets index rose 0.1%

Coins

• The Bloomberg Dollar Spot index was little changed

• The euro was little changed at $1.0862

• The Japanese yen fell 0.1% to 155.82 per dollar

• The offshore yuan fell 0.1% to 7.2430 per dollar

• The British pound was little changed at $1.2696

Cryptocurrencies

• Bitcoin rose 1.4% to $67,076.2

• Ether rose 0.7% to $3,095.1

Titles

• The 10-year Treasury yield was little changed at 4.41%

• Germany’s 10-year yield little changed at 2.51%

• Britain’s 10-year yield rose one basis point to 4.14%

goods

• Brent crude fell 0.4% to $83.64 a barrel

• Spot gold rose 0.4% to $2,424.65 an ounce

This story was produced with help from Bloomberg Automation.

–With assistance from Richard Henderson, Matthew Burgess, Hideyuki Sano and Catherine Bosley.

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