Oil rallied as Saudi Arabia and Russia extended oil supply cuts, while Nasdaq futures and European stocks pared gains. Tesla Inc. climbed after posting record quarterly sales.
(Bloomberg) — Oil rallied as Saudi Arabia and Russia extended oil supply cuts, while Nasdaq futures and European stocks pared gains. Tesla Inc. climbed after posting record quarterly sales.
Crude prices jumped as Saudi Arabia’s state-run news agency said the country will prolong its unilateral oil production cut by one month, keeping a lid on supply even as the market is expected to tighten. Its OPEC+ ally Russia also announced fresh curbs on exports. The move helped European energy shares, which outperformed the broader Stoxx Europe 600 Index.
Tesla gained 6.5% in premarket trading, while BYD Co. climbed in Hong Kong trading after the electric-car peer also reported record quarterly sales, leading shares of battery suppliers also higher. Contracts on the Nasdaq 100 were little changed, after the tech index notched its best-ever first half of a year.
Investors are tempering expectations for stocks in the second half of the year after strong gains so far. While central banks have kept up their hawkish rhetoric, signs of moderating US inflation has fueled big gains across technology shares. Traders are looking to the upcoming earnings season and data such as Friday’s nonfarm payrolls for clues on the health of the economy. Markets in the US may be quieter ahead of the Independence Day holiday on Tuesday.
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“Stocks have done well in the first half because a US recession didn’t happen,” said Nikolaos Panigirtzoglou, global market strategist at JPMorgan Chase & Co. Moreover, he added, the tech trade has turned into “a pain trade for institutional investors, causing them to capitulate. This first-half back drop creates vulnerabilities for the second half as it means if a US recession happens, there would be a rather abrupt market repricing.”
A report on Chinese manufacturing on Monday showed the economy is still struggling to rebound, while in Europe, Italy’s factories had their worst month since Covid-19 lockdowns in early 2020.
Also in focus this week will be US Treasury Secretary Janet Yellen’s trip to Beijing on July 6-9 as the world’s two largest economies look to mend ties after a spate of bilateral tensions.
Asian stocks got a boost on Monday from a surge in Pakistan’s key equity gauge after the nation clinched an initial $3 billion loan deal from the International Monetary Fund, easing default fears. In Europe, AstraZeneca Plc led health-care shares lower as results from a high-level study of its new cancer medicine raised concern the drug might not work as well as anticipated.
Key events this week:
- US construction spending, ISM Manufacturing, light vehicle sales, Monday
- Australia interest rate decision, Tuesday
- US Independence Day national holiday. Financial markets closed, Tuesday
- China Caixin services and composite PMI, Wednesday
- Eurozone S&P Global Eurozone services PMI, PPI, Wednesday
- OPEC International Seminar, speakers including OPEC+ oil ministers, kicks off in Vienna, Wednesday
- FOMC issues minutes on June policy meeting, Wednesday
- New York Fed President John Williams in “fireside chat” at meeting of the Central Bank Research Association at the New York Fed, Wednesday
- US initial jobless claims, trade, ISM services, job openings, Thursday
- Dallas Fed President Lorie Logan speaks on a panel about the policy challenges for central banks at CEBRA meeting, Thursday
- US unemployment rate, nonfarm payrolls, Friday
- ECB’s Christine Lagarde addresses an event in France, Friday
Some of the main moves in markets today:
Stocks
- S&P 500 futures were little changed as of 8:14 a.m. New York time
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average fell 0.2%
- The Stoxx Europe 600 was little changed
- The MSCI World index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.1% to $1.0896
- The British pound fell 0.2% to $1.2672
- The Japanese yen fell 0.4% to 144.84 per dollar
Cryptocurrencies
- Bitcoin was little changed at $30,593.43
- Ether rose 2.1% to $1,958.04
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.86%
- Germany’s 10-year yield advanced five basis points to 2.45%
- Britain’s 10-year yield advanced four basis points to 4.43%
Commodities
- West Texas Intermediate crude rose 1.3% to $71.57 a barrel
- Gold futures fell 0.5% to $1,920.70 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from John Viljoen and Tassia Sipahutar.
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