By Adam Haigh
Aug. 10 (Bloomberg) -- European stock-index futures fell after four straight weeks of gains left the Dow Jones Stoxx 600 Index valued at the most expensive relative to earnings in almost six years. Asian shares rose, while U.S. futures slipped.
Daimler AG, the world’s second-biggest maker of luxury cars, may drop after Morgan Stanley recommended selling the shares. Lloyds Banking Group Plc might be active after the Times newspaper said the U.K. lender may seek to raise as much as 25 billion pounds ($41.7 billion) selling shares.
Futures on the Euro Stoxx 50, a measure for the euro region, slid 0.4 percent to 2,695 at 7:43 a.m. in London. The U.K.’s FTSE 100 Index is poised to open 20 points lower, according to inter-dealer broker BGC Partners. Standard & Poor’s 500 Index futures expiring in September dropped 0.1 percent.
Europe’s Stoxx 600 has rallied 46 percent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The measure is valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
“I don’t think any economic recovery yet is written in stone,” said Robert Prugue, head of Lazard Asset Management in Sydney, which oversees about $98 billion in assets. “Being a little bit too optimistic without being truly pragmatic about the conditions yet to uncover is perhaps bordering from irrational exuberance to irresponsible exuberance,” he told Bloomberg Television.
The MSCI Asia Pacific Index climbed 1 percent today as Japanese machinery orders increased, spurring speculation the world’s second-largest economy is emerging from its recession.
Tyson, Krugman
The U.S. economy may also be on the cusp of a recovery and the impact of the nation’s stimulus plan should increase this quarter, according to Laura Tyson, an adviser to President Barack Obama.
“We may have hit stability, we may be in the beginning of an upturn” based on the latest economic data, Tyson, a member of the White House’s Economic Recovery Advisory Board, said yesterday during an interview in Kuala Lumpur. Nobel Prize- winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.
Still, options traders are increasing bets that the steepest rally in the S&P 500 since the 1930s won’t survive September, historically the worst month for U.S. equities. Traders are betting the VIX, a gauge of expected stock swings, will increase 13 percent in the next five weeks, according to futures prices compiled by Bloomberg.
‘Underweight’
Daimler may decline after Morgan Stanley downgraded the shares to “underweight” from “overweight.”
Lloyds may move. The company’s new chairman, Win Bischoff, is seeking to raise between 15 billion pounds and 25 billion pounds in a share sale as a part of a plan to reduce the bank’s exposure to the U.K.’s asset protection plan, the London-based Times reported, without saying where it got the information.
Lloyds is considering reducing the amount of assets it will put in the toxic-debt plan by as much as half in order to reduce the fees it will have to pay, the Times reported. The government may back a share sale and has agreed in principle to the bank’s use of the toxic-asset plan, though contracts have still to be signed, the newspaper said.
Bourbon SA may be active. The owner of the world’s biggest fleet of supply ships for deep-water oil exploration said second-quarter sales increased 9.7 percent to 243.5 million euros ($345.5 million).
U.K. companies are having an easier time getting access to loans in a sign the credit crunch is abating, the Confederation of British Industry said. A net 18 percent in a survey of 73 firms said credit availability improved in the past three months, compared with a net 20 percent reporting a deterioration in May, Britain’s biggest business lobby said today in London.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
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