Japan slumps, property boosts Chinese stocks: market wraps

(Bloomberg) — European stocks got off to a muted start to the week, held back by several profit warnings from automakers that dampened enthusiasm for China's economic stimulus measures.

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Europe's Stoxx 600 struggled to advance as Jeep maker Stellantis NV fell 7.4% after cutting its profit margin forecast. Aston Martin Lagonda Global Holdings plc fell 14% and Volkswagen AG fell after its second profit warning in three months. US equity futures were kept in a narrow range.

That contrasted with the mood in China, where the CSI 300 index jumped as much as 9.1%, the most since 2008, after China's three biggest cities eased rules for homebuyers while the central bank also cut mortgage rates. The measures were part of a package of measures announced last week.

Matthew Haupt, a portfolio manager at Wilson Asset Management, said China's “government seems more intent on pursuing steps to get the economy going again, so it looks a little more promising than previous efforts.” “So the rally may have a bit more legs than last time and we will wait for further announcements to get more conviction about the trajectory of the Chinese economy and stock market.”

The Chinese move spurred an outperformance among European mining stocks, with Rio Tinto Group leading the sector's advance. Dollar and Treasuries were stable.

Later this week, traders will pay close attention to eurozone inflation and manufacturing activity data, as well as Friday's US jobs report, which will help gauge the outlook for the Federal Reserve to cut interest rates later in the year.

Political developments in Europe constitute an additional risk. Austria's traditional political forces are vowing to prevent the far-right Freedom Party from forming a government after Sunday's historic victory.

Elsewhere, a slump in Japanese stocks contributed to falls in the MSCI Asia Pacific gauge, after Shigeru Ishiba's victory misplaced investors in Japan's ruling party leadership race.

Ishiba's new administration will maintain continuity in economic, fiscal and foreign policy, with former government spokesman Katsunobu Kato holding the role of finance minister, according to local media. The yen pared the previous session's gains.

After the killing of Hezbollah leader Hassan Nasrallah by Israel in Beirut, tensions in the Middle East could rise once again. Oil rose on Monday as markets awaited how Iran would respond and traders responded to China's stimulus measures.

This week's highlights:

• CPI in Italy, Germany on Monday

• Fed Chair Jerome Powell spoke at the National Association for Business Economics conference in Nashville on Monday.

• European Central Bank President Christine Lagarde speaks at the EU Parliament's monetary dialogue on Monday

• Bank of England policymaker Megan Green joined a panel at NABE on Monday to discuss global monetary policy.

• Atlanta Fed President Raphael Bostick, Fed Governor Lisa Cook, Richmond Fed President Thomas Barkin and Boston Fed President Susan Collins attended the conference on Tuesday.

• ECB policymakers on Tuesday included Olli Rehn, Luis de Guindos, Isabelle Schnabel and Joachim Nagel.

• BOE chief economist Huw Pill spoke at the Confederation of British Industry's Economic Growth Board on Tuesday

• On Tuesday, the Bank of Japan issued a summary of views for September

• South Korea CPI, S&P Global Manufacturing PMI on Wednesday

• Fed speakers include Thomas Barkin of Richmond, Beth Hammack of Cleveland, Alberto Musallem of St. Louis and Fed Governor Michelle Bowman on Wednesday.

• US nonfarm payrolls, Friday

Some of the main rice in the market:

stock

• The STOXX Europe 600 was down 0.2% at 8:28 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Dow Jones Industrial Average futures were little changed

• The MSCI Asia Pacific index fell 0.8%

• The MSCI Emerging Markets Index was little changed

currency

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1166

• The Japanese yen rose 0.2% to 141.95 per dollar

• The offshore yuan fell 0.2% to 6.9949 per dollar

• The British pound was little changed at $1.3384

Cryptocurrency

• Bitcoin fell 1.9% to $64,580.48

• Ether fell 0.8% to $2,641.44

bond

• The yield on 10-year Treasuries advanced one basis point to 3.76%

• Germany's 10-year yield was little changed at 2.13%

• Britain's 10-year yield was little changed at 3.99%

merchandise

This story was produced with the help of Bloomberg Automation.

— With assistance from Chris Bourque, Matthew Burgess and Winnie Hu.

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