MARKET WRAPS

Stocks:

European stocks climbed on Monday, driven by a Chinese rebound as authorities eased mortgage rules to boost the country's ailing property sector.

Shares of Chinese property developers jumped, as more major Chinese cities said over the weekend that they would ease mortgage policies in a bid to shore up the real-estate sector. Read more.

Among the biggest risers in Europe were companies with exposure to China, including miners and luxury fashion houses.

Stocks to Watch

Car makers feel better prepared to tackle future supply-chain disruptions, partly due to near-shoring strategies, in an industry that's undergoing a shift in those networks because of electrification, automation and evolving government policies, Capgemini Research Institute said. Read more.

Entain may have raised its full-year Ebitda expectations in its first-half results, but higher interest costs, bigger minority stakes and a higher share count after its recent placing prompted Jefferies downgrades to earnings per share expectations. Jefferies retained its buy rating on the stock, but cut its price target to 1,460 pence from 1,805 pence. Read more.

Telefonica Deutschland could partly mitigate through cost savings a hit from the loss of 1&1's wholesale business from 2025 onward, Berenberg said, as it upgraded the stock to hold from sell, albeit with continued reservations about the reported levels of indebtedness and the quality of the company's free cash flow relative to the sector. Read more.

European Central Bank

The ECB could decide against a further interest-rate rise at the Sept. 14 meeting as rates are already sufficiently restrictive, Julius Baer Research said. "The current monetary policy already seems sufficiently restrictive enough to dampen demand and slow down lending activity, and thus ensure declining inflation rates in the coming months." Read more.

Morgan Stanley said ECB interest rates may have peaked. It expects the central bank to pause interest-rates rises at the Sept. 14 meeting. "Following the release of the euro area inflation print for August, our Europe team changed their ECB call and now expect a pause in September." Read more.

Read ECB Could Maintain Tightening Bias for Some Time

Forex:

The euro has had a tough time against the dollar since mid-July, depreciating by 4.5% over that period, due to a diverging economic performance between the eurozone and the U.S., DZ Bank Research said.

"The main reason for this movement is probably the different economic development of the two currency areas."

While the U.S. shows a good economic situation, sentiment indicators in the eurozone paint a rather gloomy economic picture, DZ Bank said.

"The U.S. currency has also become more attractive due to noticeably higher yield premiums."

HSBC said the dollar was holding on to the gains it made Friday following U.S. jobs data, adding that the Fed must be content that labor-market conditions are cooling but not alarmingly so.

Activity data in the eurozone are still trending lower and aren't improving much for China. Unless those strengthen materially, then it will be harder for the greenback to fall, HSBC said.

U.S. services-sector activity data due on Wednesday will be closely watched.

Bonds:

Central-bank decisions in September may cause some short-term disruptions, but are unlikely to alter the trend of falling yields, Generali Investments said.

While government bond yields rose in August, particularly in the U.S., Generali expects bond yields to fall in the medium term, given the expected slowdown.

"Despite the recent yield increase, we are sticking to our medium-term view of lower yields."

Generali's base case is that both the Federal Reserve and the ECB have reached the peak rate in the current cycle.

LBBW said government bond performance of individual eurozone countries was relatively uniform in August, with Italy consolidating its position as an outperformer in year-to-date terms. "There were only minor movements in yield spreads over Bund over the summer."

Market participants' hopes that the European Central Bank may have already reached the peak in key interest rates are a factor to stabilize spreads at moderate levels, but growing concern that the eurozone could slip in recession is acting as a counterweight.

"This entails the risk that any efforts by governments in the peripheral countries to trim their soaring crises-related budget deficits will peter out prematurely," limiting the scope for further spread narrowing.

Read European Automobile Companies' Corporate Bond Issuance Likely to Rise

Energy:

Oil prices held steady at a nine-month high thanks to OPEC+ supply cuts and hopes that the Fed is done with raising interest rates.

Saudi Arabia is set to decide this week whether to unwind or roll over its 1 million barrel-a-day output cuts, with most analysts expecting them to continue the cut for at least another month.

Riyadh "will not want to put any renewed downward pressure on the oil market" by reversing the cuts, ING said.

DOW JONES NEWSPLUS


EMEA HEADLINES

BMW Sees Good Demand for Premium Cars, Positive Order Backlog

BMW continues to see good demand for premium cars despite the generally gloomier economic environment, and expects positive order backlog through the end of the year, the car maker's Chief Financial Officer Walter Mertl said in an interview.

In the first quarter, orders in Europe were still slightly lower than the previous year, but they have been rising into the double digits since April, and that was also the case in June, July and August, the executive said.


Germany's Trade Surplus Narrowed More Than Expected in July After Exports Fell

Germany's trade surplus narrowed in July by more than expected, reflecting weaker global demand for the country's goods as signs of an economic slowdown weigh.

The country's adjusted trade surplus-representing the difference between exports and imports of goods-fell to 15.9 billion euros ($17.13 billion) in July, compared with EUR18.7 billion in June, data from the country's statistics office Destatis showed Monday.


Nestle Sells Peanut-Allergy Treatment Business to Stallergenes Greer

Nestle said it has sold its Palforzia peanut-allergy treatment business to biopharmaceutical company Stallergenes Greer.

The Swiss consumer-goods company said Monday that it will receive milestone payments and royalties from Stallergenes Greer. The deal was closed upon signing, Nestle said.


How Novartis's CEO Learned From His Mistakes and Got Help From an Unlikely Quarter

Monday afternoons at Swiss drugmaker Novartis now feature the Ronny Gal Show.

Starting at 2:30 p.m. in Basel, an industry news and intelligence report written by Gal hits the inboxes of 250 senior officials, who rush to read which deals the chief company strategist says Novartis should pursue, what science it should investigate and what rivals are doing.


GLOBAL NEWS

Investors Head Into Fall With Jitters After Summer Rally

Stock market bulls are on edge heading into September.

The S&P 500 is up 18% so far this year, even after falling in August for its first monthly decline since February. The benchmark index rallied in the final week of the month, finishing near its monthly highs for the sixth consecutive month. Now investors are questioning whether stocks can continue defying expectations and hang onto this year's gains.


Resilient U.S. Economy Defies Expectations

There's a saying that economic expansions don't die of old age: They're murdered by the Federal Reserve. If that's the case, then the U.S. economy is outrunning its would-be assailant this year.

Steady hiring and robust consumer spending offer the latest evidence that the pandemic's effects and the government's unprecedented policy responses made the economy surprisingly resilient to the Fed's most aggressive interest-rate increases in 40 years.


Top Job for Congress: Avoiding a Government Shutdown

WASHINGTON-House and Senate leaders of both parties say they have a clear road map to avoid a government shutdown in coming weeks: Pass a short-term patch, then take some time to negotiate on full-year spending.

But some House Republicans are already crying foul, raising the prospect of more down-to-the-wire drama on Capitol Hill.


Electric Cars Power China's Economic Hopes as Internet Titans Take a Back Seat

SINGAPORE-China's internet giants drove much of the country's tech economy over the past decade. Now, electric-vehicle and battery makers are taking over the driver's seat.

The country's booming new industry flag-bearers are attracting sovereign-wealth funds, foreign partners and the brightest engineers. Riding the wave of Beijing's industrial policy gambit on clean-energy cars, they are defying the gloomy picture in much of China's economy and increasingly going global.


Biden's Age, Economic Worries Endanger Re-Election in 2024, WSJ Poll Finds

Voters overwhelmingly think President Biden is too old to run for re-election and give him low marks for handling the economy and other issues important to their vote, according to a new Wall Street Journal poll that offers a stark warning to the 80-year-old incumbent ahead of the 2024 contest.

The negative views of Biden's age and performance in office help explain why only 39% of voters hold a favorable view of the president. In a separate question, some 42% said they approve of how he is handling his job, well below the 57% who disapprove.


Trump Is Top Choice for Nearly 60% of GOP Voters, WSJ Poll Shows

Donald Trump has expanded his dominating lead for the Republican presidential nomination, a new Wall Street Journal poll shows, as GOP primary voters overwhelmingly see his four criminal prosecutions as lacking merit and about half say the indictments fuel their support for him.

(MORE TO FOLLOW) Dow Jones Newswires

09-04-23 0559ET