(Bloomberg) — European stocks swung to gains from losses Friday, joining a global equity rebound as investors looked to second-quarter earnings season to gauge how companies are weathering the impact of surging prices. Bonds and the dollar rose.
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The Stoxx 600 Index added 0.6%, poised for a weekly advance as investors shrugged off worries about the economic outlook. Nasdaq 100 contracts pared losses to trade down 0.5%, weighed by Snap Inc.’s poor results, while those on the S&P 500 slipped 0.2%.
Earning reports from American Express Co. and tech giant Twitter Inc. are due later.
Global stocks remain on course for their best week in a month, paring this year’s equity market rout to about 18%. Speculation that the worst of the selloff has passed is partly behind the move.
But angst about the damage from inflation and rapidly rising interest rates is proving hard to shake — despite a tempering in expectations of just how aggressive the Federal Reserve will be.
Underscoring recession fears, a dollar gauge rose and Treasuries extended an advance, pushing the 10-year yield to around 2.8%.
Economic data Friday showed Germany’s economy shrinking for the first time this year as inflation squeezes businesses and households and the war in Ukraine destroys confidence.
Meanwhile, Snap’s disappointing revenue hit social media stocks, including Twitter, Facebook parent Meta Platforms Inc. and Google owner Alphabet Inc.
Read more: ‘Awful’ Snap Sales Wipe $69 Billion From Social Media Stocks
The losses mark the second major sector selloff sparked by Snap in two months, as its results become a barometer for investors trying to decipher how economic uncertainty has impacted ad spending. There are growing signs that tech companies are preparing for a recession with some pulling back on hiring, while Meta has lost about half of its value this year after disappointing revenue forecasts.
Focus will now turn to the Fed’s meeting next week, where the central bank is again expected to increase interest rates to tame scorching inflation.
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.6% as of 11:06 a.m. London time
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Futures on the S&P 500 fell 0.2%
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Futures on the Nasdaq 100 fell 0.5%
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index rose 0.2%
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The MSCI Emerging Markets Index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.7% to $1.0155
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The Japanese yen was little changed at 137.43 per dollar
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The offshore yuan was little changed at 6.7747 per dollar
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The British pound fell 0.4% to $1.1946
Bonds
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The yield on 10-year Treasuries declined six basis points to 2.82%
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Germany’s 10-year yield declined 16 basis points to 1.06%
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Britain’s 10-year yield declined 10 basis points to 1.95%
Commodities
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Brent crude fell 0.2% to $103.62 a barrel
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Spot gold rose 0.4% to $1,724.83 an ounce
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