(Bloomberg) — European stocks and U.S. stock futures rose, tracking gains in Asia after China pledged fiscal stimulus and technology shares rose.
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Europe’s Stoxx 600 index rose 1% and Nasdaq 100 futures advanced after a strong earnings forecast from Micron Technology Inc. spurred a rally in stocks in late trading. A gauge of Asian stocks rose about 2%. U.S. Treasuries and the dollar were flat.
While there were no details on the size of China's planned fiscal spending, the announcement boosted risk appetite and bolstered the outlook for Europe's industries that are most exposed to its economy. Some analysts had questioned whether the monetary stimulus unveiled earlier in the week would be enough amid concerns about deflation and weak consumption.
“Does this change the global story? We’re not sure, but for now it’s probably good for the rest of the world,” said Kenneth Broux, a strategist at Société Générale SA. “Individual stocks in Europe are up because people are betting that the Chinese consumer will go out and spend, including on luxury items.”
Among the measures China is considering is injecting up to 1 trillion yuan ($142 billion) of capital into its largest state-owned banks to boost their ability to support the ailing economy, Bloomberg reported Thursday, citing people familiar with the matter. It would be the first time since the 2008 global financial crisis that Beijing has injected capital into its biggest banks.
Powell speaks
Meanwhile, S&P 500 futures rose 0.7% as traders awaited a pre-recorded speech by Federal Reserve Chairman Jerome Powell at the 10th annual U.S. Treasury market conference.
On Wednesday, Federal Reserve Governor Adriana Kugler said she “strongly supported” the U.S. central bank's rate cut last week, adding that additional rate cuts would be appropriate if inflation continued to decline as expected.
By the end of the week, the Fed's preferred price metric and a snapshot of consumer demand will corroborate last week's aggressive interest rate cut and Powell's view that the economy remains strong.
In commodities, oil fell for a second day as Saudi Arabia was reported to be considering increasing output and factions in Libya reached a deal paving the way for the return of some crude output.
Separately, the United States, the European Union and major Middle Eastern powers including Saudi Arabia and Qatar have proposed a three-week ceasefire between Israel and Hezbollah in Lebanon, as part of an attempt to clear the way for negotiations and avert all-out war in the region.
Key events of this week:
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ECB President Christine Lagarde speaks on Thursday
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U.S. jobless claims, durable goods and revised GDP, Thursday
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Federal Reserve Chairman Jerome Powell delivers pre-recorded remarks at the 10th annual U.S. Treasury market conference on Thursday
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China industrial profits, Friday
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Eurozone consumer confidence, Friday
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US PCE, University of Michigan Consumer Sentiment, Friday
Some of the main movements in the markets:
Stocks
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The Stoxx Europe 600 was up 1.1% as of 8:20 a.m. London time.
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S&P 500 futures rose 0.8%
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Nasdaq 100 futures rose 1.4%
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Dow Jones Industrial Average futures rose 0.4%
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The MSCI Asia Pacific index rose 2.1%
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MSCI's emerging markets index rose 1.8%
Coins
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.2% to $1.1156.
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The Japanese yen fell 0.2 percent to 144.97 per dollar.
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The offshore yuan rose 0.3% to 7.0112 per dollar.
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Sterling rose 0.2% to $1.3356
Cryptocurrencies
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Bitcoin rose 0.5% to $63,810.38
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Ether rose 1.5% to $2,619.81
Captivity
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The yield on 10-year Treasury bonds fell one basis point to 3.78%.
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The yield on 10-year German bonds remained virtually unchanged at 2.17%.
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The yield on 10-year British bonds remained virtually unchanged at 3.98%.
Raw materials
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Brent crude fell 2.4% to $71.67 a barrel
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Spot gold rose 0.1% to $2,660.44 an ounce
This story was produced with assistance from Bloomberg Automation.
–With assistance from Winnie Hsu, Divya Patil and Richard Henderson.
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