Awaiting the Fed: traders cautious ahead of rate decision
European stocks were muted on Tuesday as traders geared up for earnings from some of the world’s biggest corporations and key central bank rate decisions this week.
The Stoxx Europe 600 index was little changed at the open. Basic resources shares surged, with miners Anglo American Plc and Rio Tinto Plc gaining more than 3% as metal prices advanced after China’s latest stimulus pledge. Health-care stocks lagged, with Bayer AG dropping 2.5% after cutting guidance. Among other individual movers, Unilever Plc climbed as much as 5.1% after a sales beat, and French software maker Dassault Systemes SE plunged after underwhelming results.
US equity futures edged higher after a mixed session on Wall Street, where the S&P 500 posted a modest gain while the Nasdaq 100 declined after a “special rebalance.” A gauge of emerging-market stocks jumped the most in three weeks. Treasury yields were flat and the Bloomberg Dollar Index declined for the first time in six days.
Key Federal Reserve and European Central Bank’s gatherings this week will be closely watched for signs policymakers may be reaching the end of the cycle of aggressive policy tightening. There were fresh reminders about the negative recessionary affects of continuous rate hikes with disappointing data from both the US and euro area on Monday, though China’s vow to support its economy buoyed sentiment.
With predictions for a recession steadily receding over the past few months, the outlook for companies that make industrial equipment and heavy machinery, and move goods around, has improved significantly. The Dow Jones Industrial Average has risen 5% over the past month, outrunning both the S&P 500 Index and the tech-heavy Nasdaq 100, and is in the midst of its longest
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