(Bloomberg) — U.S. futures fell with European stocks as concern about tighter policy lingered at the end of a volatile week, overshadowing strong earnings from Apple Inc.
Contracts on all three major U.S. gauges were lower after an earlier advance, with those on the Nasdaq 100 giving up gains of as much as 1.4%. Apple rose in premarket trading, while Chevron Corp. fell on disappointing profits. Losses in tech and auto shares dragged on European benchmarks, outweighing robust results retailer Hennes & Mauritz AB.
A dollar gauge ticked up, while Treasuries slipped. A gauge of Asia-Pacific shares rose for the first day in six as gains in Japan offset declines in China.
Global markets have been whiplashed this week by volatility as the Federal Reserve signaled aggressive tightening, while geopolitical tensions and an uneven earnings season added to investor concerns. Also sapping sentiment on Friday, Germany’s economy shrank more than expected and a measure of euro-area confidence fell to a nine-month low.
As investors brace for rising rates, rotating out of frothier equities, value stocks are outperforming.
Money markets are now pricing in nearly five Fed hikes this year after a hawkish stance from Chair Jerome Powell. That’s up from three expected as recently as December.
“Tighter liquidity and weaker growth mean higher volatility,” Barclays Plc strategists led by Emmanuel Cau wrote in a note. The “current growth scare looks like a classic mid-cycle phase to us, while a lot of hawkishness is priced in.”
The U.S. stock market is priced “quite aggressively” versus other developed nations as well as emerging markets, and valuations in the latter can be a tailwind rather than a headwind as in the U.S., Feifei Li, partner and CIO of equity strategies at Research Affiliates, said on Bloomberg Television.
Perpetual Loser Europe Looks a Safer Bet in Global Equity Rout
Elsewhere, oil headed for a sixth weekly advance and gold nursed losses. Bitcoin held above $36,000.
What to watch this week:
- U.S. consumer income, University of Michigan consumer sentiment Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.4% as of 6:50 a.m. New York time
- Futures on the Nasdaq 100 were little changed
- Futures on the Dow Jones Industrial Average fell 0.5%
- The Stoxx Europe 600 fell 1.5%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.1% to $1.1132
- The British pound was little changed at $1.3391
- The Japanese yen fell 0.2% to 115.61 per dollar
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.84%
- Germany’s 10-year yield advanced four basis points to -0.02%
- Britain’s 10-year yield advanced four basis points to 1.27%
Commodities
- West Texas Intermediate crude rose 0.8% to $87.31 a barrel
- Gold futures fell 0.6% to $1,784.50 an ounce
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