US equity futures and European stocks fluctuated in subdued trading as investors assessed prospects for less-aggressive central bank tightening and weighed China’s latest move to stimulate its economy as Covid-19 infections rise.
(Bloomberg) — US equity futures and European stocks fluctuated in subdued trading as investors assessed prospects for less-aggressive central bank tightening and weighed China’s latest move to stimulate its economy as Covid-19 infections rise.
S&P 500 contracts inched higher before an abbreviated Thanksgiving weekend cash trading session on Wall Street. Those on the tech-heavy Nasdaq 100 were slightly lower. Energy companies climbed in premarket as oil prices clawed back some of their weekly decline. Apple Inc. slipped after a report that production of iPhones in November could fall by at least 30% at a Chinese plant where worker protests have disrupted operations.
European energy stocks were higher too, helping to keep the Stoxx 600 Index on course for a sixth week of gains, the longest winning streak in a year. Credit Suisse Group AG fell to a fresh record low in the wake of massive outflows the bank reported this week.
The dollar strengthened after three straight days of losses. Treasury yields ticked higher.
US stocks are poised to end the shortened trading week higher, rising after recent commentary from Federal Reserve officials that supported the case for a slower pace of interest-rate increases. Fed minutes published Wednesday showed that officials concluded the central bank should soon moderate the pace of rate hikes to mitigate overtightening risks.
Oil recouped some of its third weekly loss as the European Union weighed a higher-than-expected price cap on flows of Russian crude and slowdown concerns threaten the outlook for energy demand. Gold was poised for a modest weekly gain.
China’s central bank on Friday cut the amount of cash lenders must hold in reserve for the second time this year, an escalation of support for an economy racked by surging Covid cases and a continued property downturn.
“How effective that will prove to be when cities are seeing restrictions and effective lockdowns reimposed is hard to say,” said Craig Erlam, senior market analyst at Oanda. “But combined with other measures to boost the property market and ease Covid curbs, the cut could be supportive over the medium term when growth remains highly uncertain.”
Meanwhile, JPMorgan Chase & Co. quantitative strategist Khuram Chaudhry said the recent rebound in European equities driven by expectations of peaking inflation and bond yields is nothing but a bear market rally and that investors are “jumping the gun.” He forecasts euro-area equities will eventually recover “later in 2023.”
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.1% as of 7:41 a.m. New York time
- Futures on the Nasdaq 100 fell 0.2%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 was little changed
- The MSCI World index fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.2% to $1.0389
- The British pound fell 0.2% to $1.2092
- The Japanese yen fell 0.6% to 139.32 per dollar
Cryptocurrencies
- Bitcoin was little changed at $16,527.08
- Ether fell 0.2% to $1,193.45
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.72%
- Germany’s 10-year yield advanced 10 basis points to 1.95%
- Britain’s 10-year yield advanced five basis points to 3.09%
Commodities
- West Texas Intermediate crude rose 2.3% to $79.70 a barrel
- Gold futures rose 0.3% to $1,766.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller.
More stories like this are available on bloomberg.com
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