2023-06-28 09:52:00
(Bloomberg) — European stocks opened firmer, while US equity futures were pressured by report of new curbs on artificial intelligence chip sales to China.
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The Stoxx Europe 600 Index gained as much as 0.5% as shares bounced from a six-day losing streak that ended on Tuesday. UBS Group AG advanced as the company prepared to cut more than half of Credit Suisse Group AG’s workforce.
European technology firms shrugged off a Wall Street Journal report that said Washington is considering restrictions on chips made by Nvidia Corp. and other companies to China. The news knocked shares of Nvidia and Advanced Micro Devices Inc. in afterhours New York trading and kept US equity futures in the red on Wednesday, with contracts on the tech-heavy Nasdaq down about 0.3%.
Investors are also awaiting news from a central banking forum in Portugal, where the European Central Bank’s Christine Lagarde, Federal Reserve’s Jerome Powell, Bank of Japan’s Kazuo Ueda and Bank of England’s Andrew Bailey are due to speak later in the day.
Treasury yields were broadly lower, yet resilient US economic data has underscored the likelihood that the Fed has further to go in tightening monetary policy. Lagarde and several other policymakers have also stressed the ECB will continue raising interest rates.
“Will they stop or won’t they stop? Will we have a recession and when? All these types of questions going through investors minds causes a lot of vol in thin markets,” said Luke Hickmore, investment director at Abrdn.
Signs of economic stress in China are keeping markets attuned to the possibility of stimulus measures. Data on Wednesday showed industrial firms profits dropped further last month, the latest in a string of weak data. The longer-term market impact of more US curbs on technology sales to China was unclear.
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Robert Lea, an analyst at Bloomberg Intelligence, said the restrictions could delay AI developments by Chinese firms, without changing things significantly in the long run.
“Chinese AI firms may also be able to source dedicated AI chips from third party countries,” Lea said. “So I think it will be hard for US to enforce the regulations.”
The results of the Fed’s annual stress test of the banking industry will come out later Wednesday. Analysts largely expect banks to sail through the tests even as regulators explore more stringent requirements in the aftermath of a few collapses in the financial industry.
Key events this week:
US wholesale inventories, goods trade balance, Wednesday
Fed to unveil results of annual banking industry stress test, Wednesday
Policy panel with ECB’s Christine Lagarde, Fed Chair Jerome Powell, BOJ’s Kazuo Ueda and BOE’s Andrew Bailey, Wednesday
Eurozone economic confidence, consumer confidence, Thursday
US GDP, initial jobless claims, Thursday
Atlanta Fed President Rafael Bostic speaks, Thursday
China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 3:26 a.m. New York time
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 rose 0.5%
The MSCI World index rose 0.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.0951
The British pound fell 0.1% to $1.2735
The Japanese yen was little changed at 144.05 per dollar
The offshore yuan fell 0.3% to 7.2444 per dollar
Cryptocurrencies
Bitcoin fell 1% to $30,346.25
Ether fell 1.6% to $1,863.13
Bonds
The yield on 10-year Treasuries was little changed at 3.76%
Germany’s 10-year yield was little changed at 2.36%
Britain’s 10-year yield was little changed at 4.38%
Commodities
West Texas Intermediate crude rose 0.2% to $67.83 a barrel
Gold futures fell 0.2% to $1,919.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
—With assistance from Charlotte Yang, Ameya Karve and Allegra Catelli.
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