China's manufacturing picks up the pace

 

Earnings Outlook
 

Investors will get a further chance to assess the economy when companies start releasing financial results in July. Earnings for S&P 500 companies probably grew 5.2% during the second quarter while sales rose 3.2%, analyst estimates compiled by Bloomberg show. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3% and sales to increase 3.7%.

In Europe, three shares advanced for every two that declined in the Stoxx 600, with trading volumes 43% greater than the 30-day average, data compiled by Bloomberg show.

Lenders and commodity producers in the Stoxx 600 led gains among 19 industry groups.
 

BNP Rally
 

BNP Paribas SA added 3.7%. France’s largest bank said a record $8.97 billion fine for breaking U.S. sanctions won’t derail its growth plans or force it to reduce its dividend.

Rio Tinto Group and BHP Billiton Ltd., the world’s two largest mining companies, gained more than 1.9%.

Bilfinger SE tumbled 16% after the German builder cut its full-year profit forecast. Kloeckner & Co SE, the German steel trader, fell 4.8% as Credit Suisse Group AG recommended selling shares of the German steel trader.

The pound (CME:B6U14) gained 0.3% to $1.7149 and 10-year gilt yields jumped four basis points to 2.71%. An industry index rose to 57.5 in June from 57 in May, Markit Economics said today. Economists forecast a decline to 56.8, based on the median estimate in a Bloomberg News survey.

The yen (CME:J6U14) dropped against 13 of it 16 major counterparts, weakening 0.3% to 101.58 per dollar.
 

Holding Steady
 

“Economic indicators still suggest everything is in place for a recovery,” Dirk Thiels, head of investment management at KBC Asset Management NV, said by phone from Brussels. “The data in Europe, although not spectacular, is holding steady above the expansion level, and the U.S. looks like it’s going in the right direction. We managed to have quite a decent run in the first quarter and now people are waiting for the next catalyst. There could be a positive surprise from earnings.”

The ruble extended its two-day drop to 1.6%, the most on a closing basis since Feb. 19, amid growing concern over further sanctions. Ukraine’s hryvnia  lost 0.6% and the benchmark equity gauge was little changed.

Ukrainian President Petro Poroshenko refused to extend the truce a second time, citing more than 100 violations by pro-Russian rebels, according to a statement on his website today. Sergei Naryshkin, speaker of Russia’s Duma, called for the cease-fire to be extended, Interfax news agency reported.

Dubai stocks ended three days of declines after a mortgage provider part-owned by Emaar Properties PJSC proposed a new debt deal, boosting shares in the developer of the world’s tallest tower. The DFM General Index gained 3.2%, after earlier losing as much as 5.4%. Emaar, which has the biggest weighting on the index, rallied 5.8%.

WTI oil advanced to $105.87 a barrel, after falling 1.1% the previous three sessions. China is the biggest energy consumer.

Corn dropped 0.4% after falling 4.9% yesterday when the U.S. government said domestic stockpiles will be larger than forecast.

Treasuries rose in the first half of 2014 to almost erase last year’s losses as the U.S. economy contracted while conflict in Iraq and Ukraine fueled demand for the safest securities. The Bloomberg U.S. Treasury Bond Index climbed 3.2% this year through the end of last week, after declining 3.4% in 2013.

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