European Stocks Rise With Earnings as Bonds Steady: Markets Wrap

(Bloomberg) — European stocks rose, bolstered by strong results from BP Plc, while global bond markets steadied after the biggest two-day selloff in months.

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BP rallied 6% as the oil major announced plans to repurchase $3.5 billion of shares in first half. UBS Group AG retreated after earnings disappointed analysts. US equity futures ticked higher. Ten-year Treasuries held at 4.14% after yields soared about 14 basis points in the previous session. The dollar retreated for the first day in three.

Some of the biggest market moves on Tuesday were in Asia, where Chinese equities soared on speculation authorities are planning more forceful efforts to end the rout. Regulators plan to brief President Xi Jinping on the market as soon as Tuesday. The Hang Seng China Enterprises Index jumped almost 5%.

China’s market “is looking for clearer signals on the economic recovery,” Marcella Chow, global market strategist for JPMorgan Asset Management, said on Bloomberg Television. “Expectations remain quite low — markets and investors are still grappling with the weak economic recovery.”

In Europe, the Stoxx 600 benchmark climbed 0.5%. Futures contracts for the S&P 500 added 0.1%.

The Treasuries selloff on Monday came after the Institute for Supply Management’s services gauge hit a four-month high while prices picked up. The news jolted trading when investors were already digesting cautious views from some Fed speakers including Jerome Powell.

The “one-two punch” prevented market players from achieving further upside, according to Jose Torres at Interactive Brokers. JPMorgan Chase & Co. strategist Marko Kolanovic said that “absent a material shock, we think this year’s easing will prove more moderate than markets have priced.”

In commodities, gold was steady at $2,026 per ounce. West Texas Intermediate climbed 0.4%.

Corporate Highlights:

UBS posted a net loss of $279 million for the three months to December, slightly worse than analysts estimated. The bank said it will resume share buybacks this year, vowing to hand as much as $1 billion to shareholders in the second half.
BP Plc accelerated share buybacks as its new chief sought to woo investors while sticking to the company’s clean-energy strategy. After fourth-quarter profit exceeded estimates, the London-based oil and gas giant said it will repurchase $1.75 billion of shares each quarter in the first half of the year, compared with $1.5 billion in the prior three months.
Infineon Technologies AG guided for lower-than-expected revenue this year as the German chipmaker is hit by a broader slump in semiconductor demand from industrial customers.

Key events this week:

Eurozone retail sales, Tuesday
Germany factory orders, Tuesday
Bank of Canada Governor Tiff Macklem speaks, Tuesday
Fed’s Loretta Mester and Patrick Harker speak, Tuesday
Germany industrial production, Wednesday
Walt Disney earnings, Wednesday
Fed’s Adriana Kugler and Tom Barkin speak, Wednesday
China PPI, CPI, Thursday
US wholesale inventories, initial jobless claims, Thursday
Treasury Secretary Janet Yellen speaks at a Senate banking committee hearing on the Financial Stability Oversight Council annual report, Thursday
Pharma CEOs speak at a Senate panel on prescription drug prices, Thursday
ECB Chief Economist Philip Lane speaks, Thursday
ECB publishes economic bulletin, Thursday
US CPI revisions, Friday
Germany CPI, Friday
President Joe Biden hosts German Chancellor Olaf Scholz at the White House, Friday