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The market at 11am. Good results and greater peace of mind in China

We start the analysis for the European stock exchanges:

European stocks hit all-time highs on Thursday as strong returns from big commodities companies Airbus and other companies cast an optimistic tone, and the fading of concern over China’s regulatory measures also helped sentiment.

The pan-European STOXX 600 Index rose 0.3% to a new all-time high of 463 points in morning trading.

Airbus rose 3.4%, providing the biggest boost to the index, after the world’s largest aircraft maker raised its full-year delivery and profit forecast significantly.

Britain’s Royal Dutch Shell gained 3.5% and France’s TotalEnergies added 2.3% after both companies announced share buybacks as rising oil and gas prices boosted their profits.

Mining companies, already the best performing in 2021, rose 1.9% after Anglo American increased its shareholder pay to a record $ 4.1 billion.

Strong quarterly earnings and optimism around the European reopening put the STOXX 600 on track for its sixth consecutive month of earnings, despite lingering concerns about inflation and China’s regulatory crackdown.

“Globally diversified stocks have posted the best results per share, while consumer stocks with high exposure to emerging markets have posted the weakest,” said Milla Savova, investment strategist at BofA, in a note.

However, Savova noted that STOXX 600 company mentions of inflation have risen by more than 400% over the past year, putting them at an all-time high in absolute terms.

Investors were reassured as central banks maintained their supportive stance. US Federal Reserve Chairman Jerome Powell took a twist on Wednesday by stating that the US job market still has “some ground to cover” before it’s time to start. to withdraw financial support.

Finnish telecoms equipment maker Nokia rose 7.1% after raising its full-year outlook as it benefited from a strong turnaround in its business.

Europe’s largest automaker, Volkswagen, earlier hit an all-time high by raising its profit margin target for the second time in less than three months.

About 41% of STOXX 600 companies have submitted their reports so far, and 67% of them have exceeded analyst earnings estimates, according to Refinitiv IBES data. Generally 51% beats profit forecasts.

Overall, earnings for the STOXX 600 companies are expected to increase 120.8% in the second quarter.

Among the bears, Swiss bank Credit Suisse fell 3.9% after registering a fall of almost 80% in its second quarter profit, affected by the consequences of the Archegos bankruptcy.

Food giant Nestlé and brewer Anheuser-Busch InBev both fell after their results. (Information from Sruthi Shankar in Bengaluru; edited by Subhranshu Sahu and Sriraj Kalluvila) .. Translate serenitymarkets

We now go to global markets:

LONDON, July 29 (.) – Global stock markets rose again on Thursday as the US Federal Reserve signaled it was in no rush to cut stimulus and Beijing’s guarantees sent slumped Chinese stocks bouncing. from the canvas they were on.

There was also promising news on the long-awaited US infrastructure bill, as the Senate voted overnight to advance the $ 1.2 trillion deal, as well as a day packed with benefits and data. economic.

The rebound in Chinese markets included a nearly 10% rise in tech giant Tencent – its second-biggest rise in nearly a decade – after it was reported that regulators had called on banks overnight to ease charges. concerns about the recent crackdown in sectors such as technology and education, and overseas IPOs.

“Beijing is working hard to curb the growing concerns surrounding its regulatory measures,” said RBC’s head of Asian currency strategy Alvin Tan.

The gains pushed top-notch stocks up 1.6%, though they continued to decline 5% on the week, while the Shanghai Composite Index added 1.2%.

However, European stocks reached new all-time highs, as the strong results of Total and Shell, Airbus and others offset the almost 5% fall of the Swiss bank Credit Suisse, which posted a slump in earnings of almost 80 % after the calamities of Archegos and Greensill.

MSCI’s broader emerging market equity index rebounded 2%, after falling to its lowest level since early December on Wednesday. The Japanese Nikkei rose 0.7%, while South Korea rose 0.2%.

S&P 500 futures were up 0.1%. Nasdaq futures fell 0.1%, perhaps weighed down by the decline in Facebook shares.

On Wednesday, Facebook plunged 3.5% in post-market moves after it warned that its revenue growth would “slow significantly” despite reporting strong ad sales.

Markets hit back and forth overnight as the Federal Reserve’s policy statement said progress had been made toward its economic targets, which seemed to be approaching the day when it could start to curtail its massive asset buying campaign.

Peak growth was also a persistent theme. Data to be released later Thursday is expected to show that the US economy likely grew at the fastest pace in 38 years in the last quarter, as government aid and vaccines fueled spending.

However, Federal Reserve Chairman Jerome Powell took a twist by emphasizing that they are “some distance” from the substantial gains in employment that are needed to start tapering.

JPMorgan economist Michael Feroli said: “There are three more (US) employment reports before the November meeting, and two more between the November and December meetings.”

“We are still waiting for an announcement in December, although we see the risk of it coming in November.”

Although the next Fed meeting is not until the end of September, the Jackson Hole Annual Monetary Policy Symposium is held Aug. 26-28, which means the talk about tapering will not be taking a break.

As for bonds, the net result was that US 10-year yields were flat at 1.24%, not far from the recent five-month lows of 1.128%.

“My view is that the Federal Reserve interest rate will have a 1% grip” in the longer term, said PineBridge’s global head of credit and fixed income, Steven Oh. “I don’t see an outcome where we see rampant inflation, far from it.”

The pattern was the same for the dollar, which rose after the FOMC statement, then fell after Powell’s statements and then fell in both Asia and Europe.

The euro rose to $ 1.1871 and moved away from its four-month low of $ 1.1750.

The dollar fell to 109.75 yen, from a high of 110.58 earlier in the week. The dollar index fell to 92.032, from its recent high of 93.194.

In commodity markets, China-sensitive copper rose 1.25% and gold rose to $ 1,817 an ounce, but remains in the $ 30 range of the last 17 sessions.

Oil prices also strengthened after data showed that US crude inventories fell to pre-pandemic levels, returning market attention to supply shortages rather than rising COVID infections. -19.

Brent rose 73 cents to $ 75.47 a barrel, while US crude added 80 cents to $ 73.21.

(Additional reporting from Wayne Cole in Sydney; edited by Robert Birsel) .. Translate serenitymarkets

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