European stocks traded mostly higher on Monday, tracking gains in Asian stocks due to reduced tensions between Iran and Israel.

"Investors are moving back into riskier assets like stocks and selling safe havens," IG said.

Meanwhile, European Central Bank officials are "increasingly backing a June rate cut." However, concerns linger over possible delays to U.S. interest-rate cuts, IG said.

This week focus centers on corporate earnings, particularly key U.S. earnings, a Bank of Japan meeting and U.S. PCE inflation data on Friday.

U.S. Markets:

Stock futures were rising as investors turned their attention to corporate earnings.

Earnings reports are expected from Verizon Communications, Cadence Design Systems, Truist Financial, and Nucor.

Stocks to Watch

Talks between Salesforce and Informatica have fizzled after the companies couldn't agree on terms, WSJ reported. Salesforce shares were up 3.2%, while Informatica declined 7.7%.

Tesla cut prices further in China amid an intensifying price war. Tesla's shares fell 2.5% premarket, threatening to further deepen the company's 41% loss this year. U.S.-listed shares of rival Li Auto also fell premarket, after the Chinese company cut prices in the country as well.


The dollar edged lower as risk sentiment improved due to easing concerns about Middle East tensions, though U.S. data later this week could push it higher again, ING said.

"The dollar may see a further softening in its momentum due to a calmer risk environment, but we see data reinforcing the notion of a resilient U.S. economy with lingering inflation issues, so the key underlying arguments for a stronger dollar should not be dented."


Morgan Stanley Research raised its forecast for the year-end level of 10-year Treasury yields, now expecting it to end the year at 4.15%, 20 basis points higher than its previous forecast of 3.95%.

Morgan Stanley now expects Federal Reserve interest-rate cuts to start in July, with three cuts in 2024, followed by four in the first four FOMC meetings of 2025.

They see the two-year Treasury yield at 4.30% by the end of 2024. Its forecast sees the 2-10-year maturity segment of the Treasury curve remaining inverse this year--with shorter-dated bond yields being higher than their longer-dated peers.

Commerzbank Research takes a cautious view on duration--a measure of how sensitive a bond is to interest-rate changes--as 10-year German Bund yields explore ground above 2.5%.

"Bunds look set to continue to trade heavy as the Middle East safe-haven bid wanes and the euro short-end gets wary of how far interest rate expectations for the Federal Reserve and the European Central Bank can diverge."

June remains the most likely date for the ECB to start cutting interest rates, "the Fed meanwhile gets increasingly wary about upside risks to its inflation outlook, and it looks unclear whether the Fed can cut rates this year," Commerzbank said.

Ten-year Italian government bonds marginally outperformed German Bunds in early trade after S&P Global Ratings affirmed Italy's BBB rating and stable outlook.

"Given S&P rates Italy at the top end of its BBB-/BBB range by the three main agencies, this should accelerate the reversal of idiosyncratic risk premium in BTPs...," Citi Research said.


Oil prices fell more than 1% as fears of a broader conflict in the Middle East faded and the prospect of higher-for-longer interest rates weighed on sentiment.

"Oil prices gave back almost all of their gains in the early trading session on Friday after it became clear that Iran was downplaying Israel's limited retaliatory attack," ING said.

"The market is obviously of the view that spare OPEC production capacity will come into play in the event of any supply shocks, or that ongoing tension is unlikely to lead to significant supply losses."

Meanwhile, investors await key U.S. data this week after recent readings showed that progress on curbing inflation has stalled this year, denting hopes for early rate cuts.

OCBC Global Markets Research said the situation in the Middle East remains fluid and warrants close monitoring.

"We see risks becoming fairly binary at this point of a de-escalation or escalation in tensions, at least over the coming weeks."

Under a de-escalation scenario, global diplomatic efforts will probably take hold, it said. Meanwhile, Brent oil prices may stay high around $86/bbl in 2Q, OCBC predicted.

If there's an escalation to a wider regional conflict, a series of tit-for-tat attacks between Israel and Iran can't be ruled out, and Brent could top $100/bbl and reach $120/bbl, it said.


Gold futures fell 1.8% as diminishing geopolitical tensions in the Middle East hit safe-haven demand.

Iran downplayed Friday's retaliatory Israeli missile attack, which suggests that its promised major escalation isn't going to be immediately forthcoming, Rabobank said.

"Markets might have relaxed slightly, but we should be under no illusion that the conflict is over."

UBS now expects the gold price to end this year at $2,400/oz, up from $2,200/oz, as investors fear missing out on the precious metal's rally.

The bank thinks gold could trade as high as $2,500/oz this year, although it may pause for breath in the near term.

"Although gold's correlation with rates is currently in question, we still think that Fed easing and the outlook for lower real rates is still the main driver for bullish gold views," UBS said.


CVC Capital Partners Eyes Up to $16 Billion Amsterdam IPO

Global buyout firm CVC Capital Partners has priced its initial public offering implying a market valuation of up to 15 billion euros ($15.99 billion), confirming a Wall Street Journal report on April 14.

CVC, which first announced its IPO plan on April 15, has set a range of EUR13 to EUR15 a share. It plans to raise EUR250 million and float on Euronext Amsterdam, with trading expected to start on Friday.

Hipgnosis Songs Fund Would Recommend $1.50 Bln Blackstone Offer If Formal Proposal Made

Hipgnosis Songs Fund, home to the catalogue of artists such as Neil Young, Shakira and Red Hot Chili Peppers, said it received a $1.50 billion offer approach from Blackstone Funds that it would be prepared to recommend to shareholders if a formal takeover was made.

The London-listed song catalog fund said Sunday that it had received the approach on Saturday but cautioned that there is no certainty any formal offer will be made and it continues to recommend the $1.40 billion takeover by Apollo-backed music company Concord Chorus as announced on Thursday.

VW Works Closely With Unions in Germany, but UAW May Be Less Cuddly

BERLIN-Volkswagen knows all about running a business with union representatives at the table. But that experience may not be a perfect guide for how to work with the United Auto Workers at its Chattanooga plant.

After workers at the plant last week voted in favor of being represented by the UAW, VW thanked employees for participating in the ballot. Now, under federal labor law, the company must enter negotiations with the UAW on an agreement covering pay, work hours, safety protocols and other items.

Iran's Nuclear Calculus Has Now Become More Dangerous

The rising tensions between Iran and Israel have provoked understandable foreboding. On April 1, an Israeli airstrike killed a senior Iranian commander in Damascus. Last weekend, Iran responded by launching more than 300 drones and missiles at Israel, which in turn prompted Israel to strike targets in the Iranian city of Isfahan on Thursday night. As the two historic antagonists climb the tiger's back, the Biden administration is hardly alone in fearing a regional conflagration.

The Islamic Republic seeks revenge for its dead, while Israel needs to restore deterrence, badly damaged by Hamas's Oct. 7 assault. If Israel fails to reestablish sufficient deterrence, it must prepare for a future filled with air-raid warnings and Israelis continuously in bomb shelters.


China's Benchmark Lending Rates Kept Unchanged

China's benchmark lending rates were kept unchanged, official data showed on Monday, in line with market expectations after key policy rates were held steady amid signs of economic recovery.

The one-year loan prime rate was kept at 3.45%, while the five-year rate was left at 3.95%, said the People's Bank of China.

Move Aside, Big Banks: Giant Funds Now Rule Wall Street

Giant investment companies are taking over the financial system.

Top firms now control sums rivaling the economies of many large countries. They are pushing into new business areas, blurring the lines that define who does what on Wall Street and nudging once-dominant banks toward the sidelines.

Big Stocks Won When Markets Rose. They Are Winning Again in the Selloff.

One of the biggest concerns amid the run-up in stocks in the first three months of the year was that the rally was dominated by the biggest companies. As it sold off this month, the market became even more top heavy. Blame the Fed, and a change in how investors react to it.

This isn't how it was supposed to be. For weeks now Wall Street has been pushing the idea that the market is broadening out beyond the "Magnificent Seven" Big Tech stocks, helped by the dismal performance this year of formerly magnificent Tesla (down 41%) and Apple (down 14%).

Trump's Hush-Money Trial: What to Know as the Case Begins

Donald Trump is expected to spend the next six weeks in a Manhattan courtroom, defending himself against accusations he covered up a hush-money payment to porn star Stormy Daniels. Prosecutors say he orchestrated a scheme before the 2016 election to buy her silence about an affair, which Trump denies.

The criminal trial, taking place in the midst of Trump's campaign for president, might be the only of the four he faces to be heard by a jury before voters head to the polls in November.

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04-22-24 0540ET