Euro stocks, U.S. futures drop amid caution
European stocks and U.S. equity futures drop as global markets remain cautious despite China’s measures to support property sector, Bloomberg reported on Tuesday.
The Stoxx Europe 600 index opened with a 0.3 per cent drop, breaking a four-day surge that brought it close to its record high from January 2022 on Monday.
Iron ore prices slumped, dragging down basic-resource stocks led by miners Anglo American Plc and Rio Tinto Plc.
The chemicals sub-sector did better, with Air Liquide SA surging over 4 per cent as the French gas producer exceeded analysts’ margin expansion forecasts. Barclays Plc announced capital return plans and climbed up to 6 per cent.
U.S. financials markets were closed on Monday for a public holiday, and futures on the S&P 500 and Nasdaq 100 dropped. The 10-year Treasury yield was steady ahead of an auction of 40-year notes. There was little movement in the dollar’s gauge.
Investors may get a new boost for equities from bellwether Nvidia Corp.’s earnings on Wednesday as they assess the global economy’s health. The chip giant has overtaken Amazon.com Inc.’s market value as it is expected to benefit greatly from artificial intelligence developments.
“Nvidia results on Wednesday could be a turning point for the markets,” Charles-Henry Monchau, chief investment officer for Banque Syz, said on Bloomberg Television.
Monchau added that very few large-cap growth stocks support the market, and a pullback could happen if they fail for any reason.
Asian stocks dropped as China’s mortgage rate cut did not ease worries about its economy. Japan, Australia and South Korea’s benchmarks were negative. Chinese stocks varied.
Willer Chen, an analyst at Forsyth Barr Asia Ltd., said the five-year loan prime rate cut was “a good gesture” by the commercial banks, but the property problem was not about the mortgage rate. He said the move might help the property demand a little, but not much.
BHP Group, the biggest miner in the world, made $6.57 billion in profits, below expectations, and said China, its top customer, wanted more despite housing weakness.
Capital One Financial Corp. will buy Discover Financial Services for $35 billion in stock, creating the biggest U.S. credit card lender by loan volume.
Fed January meeting minutes on Wednesday and Eurozone inflation data on Thursday could affect markets this week.
Gold traded around $2,020 per ounce, slightly higher than Monday. US oil price also rose amid Red Sea tensions, a key trade route.
