Stocks Drift With U.S. Futures; WTI Crude Gains: Markets Wrap

(Bloomberg) — Stocks and U.S. futures were steady on Wednesday as traders weighed growing confidence in the global economic recovery against risks from a highly infectious coronavirus strain.

The Stoxx Europe 600 Index opened little changed, with travel firms and cruise operators among the laggards as fears of the highly contagious Delta coronavirus variant continue to spur travel curbs in the region. That comes as data showed confidence in the euro-area economy improved to the highest level in more than two decades in June.

S&P 500 futures were steady following another record close for the gauge, with figures showed U.S. consumer confidence soared in June to a fresh pandemic high. Asian equities were little changed, while Japan and Hong King dipped.

The dollar steadied with Treasury yields as traders digested the latest Fed comments. On asset purchases, Thomas Barkin said Tuesday he wants to see much more U.S. labor market progress before slowing them, while Christopher Waller said economic performance warrants thinking about pulling back on some stimulus.

Markets remain finely balanced between hopes for an imminent return to normal and fears that runaway inflation or Covid variants could derail the economic recovery. For now, stocks remain in rally mode, despite stretched valuations and the prospect of tighter monetary policy as the recovery stokes commodity prices and inflation.

“The environment in Q3 should still be supportive for risky assets, though fear of bouts of persistent inflation could alter this scenario,” Sebastien Galy, senior macro strategist at Nordea Investment Funds SA, wrote in a note. “We expect to see bouts of volatility from this.”

Elsewhere, WTI crude oil climbed back above $73 a barrel ahead of a key OPEC+ meeting that’s expected to lead to an increase in supply.

For more market commentary, follow the MLIV blog.

Here are some events to watch in the markets this week:

OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation WednesdayChina’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party ThursdayOPEC+ ministerial meeting ThursdayECB President Christine Lagarde speaks FridayThe U.S. jobs report is due Friday

These are some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.1% as of 8:18 a.m. London timeFutures on the S&P 500 were little changedFutures on the Nasdaq 100 rose 0.1%Futures on the Dow Jones Industrial Average were little changedThe MSCI Asia Pacific Index was little changedThe MSCI Emerging Markets Index was little changed

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1899The Japanese yen was little changed at 110.50 per dollarThe offshore yuan was little changed at 6.4617 per dollarThe British pound was little changed at $1.3823

Bonds

The yield on 10-year Treasuries was little changed at 1.47%Germany’s 10-year yield was little changed at -0.17%Britain’s 10-year yield was little changed at 0.73%

Commodities

Brent crude was little changedSpot gold was little changed

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