Markets await earnings, 30-year US government debt sale

Stocks and bonds posted small moves on Thursday as investors grappled with a slew of company reports and prepared for a sale of 30-year US government debt.

Europe’s Stoxx 600 gauge climbed 0.3% on the busiest earnings day of the season. Unilever Plc rallied on better-than-expected sales growth while A.P. Moller-Maersk A/S tumbled more than 13% after predicting the shipping industry will be hit by a slowdown later this year. Futures on the S&P 500 were flat after the underlying index hit a fresh high on Wednesday that took it closer to the 5,000 level.

After successful sales of three- and 10-year bonds, the US Treasury’s latest auction of longer-maturity debt could prove a tougher test of investor appetite. Markets have so far largely shrugged off fears around the commercial real estate sector and absorbed a run of warnings from Fed policy makers that a cut isn’t likely until May at the earliest.

“This week’s government bond auctions have generally been well received, with the latest selloff in rates likely helping the case,” said Evelyne Gomez-Liechti, a multi-asset strategist at Mizuho in London. “Today’s thirty-year Treasuries auction will be the last test of the week.”

The European Central Bank’s Philip Lane and the Fed’s Thomas Barkin are due to speak on Thursday. The yield on 10-year Treasuries was down two basis points at 4.11%.

In Asia, stocks were mixed as mainland Chinese equities fluctuated on the final trading day before the Lunar New Year holidays. China’s CSI 300 Index swung between gains and losses after the nation replaced the head of its securities regulator Wednesday, a surprise move that may foreshadow more forceful steps to support the stock market. 

SoftBank Group Corp. surged 11% after reporting its first profit following four straight quarters of losses. Arm Holdings Plc, in which SoftBank owns a stake, had rallied by as much as 38% in after-hours trading in New York after upbeat earnings.

Alibaba Group Holding Ltd. shares fell around 6.8% in Hong Kong despite the company announcing $25 billion in stock repurchases. 

Oil extended a three-day climb. Gold steadied for a second day.

Corporate Highlights: 

• Credit Agricole SA shares fell as investors looked past the French bank’s net profit beat to focus on underlying pre-tax income which missed consensus estimates, with all divisions but one delivering weaker performance than expected.
• Maersk said it expects the shipping industry to be hit a slowdown later this year when the current boost to freight rates from the Red Sea conflict evaporates.
• Unilever Plc, the maker of Magnum ice-cream, sold more products like deodorant and mayonnaise for the first time in more than two years, as easing price inflation encouraged shoppers to buy more.
• AstraZeneca Plc reported lower-than-expected profit and a forecast for this year that failed to allay concerns about margins. Earnings rose to $1.45 a share in the fourth quarter, falling short of analysts’ estimates.
• Adyen NV reported net revenue for the second half of the year that beat estimates as increased consumer spending boosted the payment-processing company’s volumes.
• Gucci sales fell in the final months of last year as the Italian label owned by Kering struggled to lure more wealthy shoppers to its pricey Double G belts and Princetown slippers over the holiday season.
• Siemens AG saw orders largely stagnate in the fiscal first quarter as factory-automation purchases in China more than halved, offsetting gains in other units.

 Key events this week:

• US wholesale inventories, initial jobless claims, Thursday
• Treasury Secretary Janet Yellen speaks at a Senate banking committee hearing on the Financial Stability Oversight Council annual report, Thursday
• Pharma CEOs speak at a Senate panel on prescription drug prices, Thursday
• ECB Chief Economist Philip Lane speaks, Thursday
• ECB publishes economic bulletin, Thursday
• US CPI revisions, Friday
• Germany CPI, Friday
• President Joe Biden hosts German Chancellor Olaf Scholz at the White House, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 9:33 a.m. London time
• S&P 500 futures were little changed
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index fell 0.1%
• The MSCI Emerging Markets Index fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0779
• The Japanese yen fell 0.4% to 148.70 per dollar
• The offshore yuan was little changed at 7.2127 per dollar
• The British pound was little changed at $1.2629

Cryptocurrencies

• Bitcoin rose 1.1% to $44,669.35
• Ether fell 0.3% to $2,422.48

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.11%
• Germany’s 10-year yield declined one basis point to 2.30%
• Britain’s 10-year yield declined two basis points to 3.97%

Commodities

• Brent crude rose 0.4% to $79.54 a barrel
• Spot gold fell 0.2% to $2,030.84 an ounce

This story was produced with the assistance of Bloomberg Automation.