Europe Stocks Drop as Futures Drift; Dollar Slips: Markets Wrap

European stocks slipped while U.S. futures fluctuated on Thursday as a global rally in equities showed signs of faltering after stimulus talks in Washington remained deadlocked. The dollar fell before key unemployment data.

The Stoxx Europe 600 Index opened lower on declines in miners and banks. Insurer Aegon NV tumbled after its profit missed estimates and withdrawing financial targets over uncertainty from the pandemic. Futures on the three main American equity gauges pointed to modest losses after the S&P 500 Index closed within 0.2% of its all-time high.

Stocks in Asia were mostly higher. Gold resumed its advance and Treasury 10-year notes headed for their first gain in a week after yields closed at the highest since early July.

Global stocks erase losses for the year

Stock markets in much of the world are recovering most of their losses triggered by the onset of the pandemic, though investors continue to bank on further fiscal stimulus. Federal Reserve speakers sounded more urgent about the need to protect a nascent recovery. Dallas Fed President Robert Kaplan called on officials to push harder for adherence to protective behaviors and said extending unemployment benefits is “critical” to growth.

Meantime, some hard-hit U.S. states showed signs of improvement, with Texas and California reporting falling hospitalizations from the virus.

“The main force that’s been driving markets the last few weeks has really been momentum,” said Kevin Caron, portfolio manager for Washington Crossing. “We’ve got a market that’s focused on the good case outcome for the virus, we’ve got a market that has taken a great deal of comfort in that fiscal policy is going to be there to support an economy through tough times.”

Elsewhere, oil steadied after rising earlier on signs of improving demand. Shares in Japan saw the bulk of gains during the Asian session as the MSCI gauge for the region recouped all its 2020 losses. Hong Kong stocks dipped, and Australian equities underperformed as earnings at some firms disappointed.

Here are some key events coming up:

  • Initial and continuing jobless claims are due later Thursday in the U.S.
  • China releases a slew of data for July on Friday, including industrial production and retail sales.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index were little changed at 8:16 a.m. London time.
  • The Stoxx Europe 600 Index declined 0.3%.
  • Germany’s DAX Index dipped 0.1%.
  • The MSCI Asia Pacific Index advanced 0.6%.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.2%.
  • The euro advanced 0.3% to $1.182.
  • The Japanese yen strengthened 0.2% to 106.74 per dollar.
  • The British pound advanced 0.2% to $1.3059.

Bonds

  • The yield on 10-year Treasuries decreased two basis points to 0.66%.
  • Germany’s 10-year yield decreased one basis point to -0.46%.
  • Britain’s 10-year yield fell two basis points to 0.216%.

Commodities

  • West Texas Intermediate crude decreased 0.3% to $42.55 a barrel.
  • Gold strengthened 0.7% to $1,928.64 an ounce.

-Bloomberg