(Bloomberg) — U.S. equity futures rose Friday as Amazon.com Inc. earnings soothed nerves, while a climb in Hong Kong shares aided Asia. Bonds fell on an ever-louder hawkish chorus from key central banks.
Contracts on the tech-heavy Nasdaq 100 were up about 1.5% after e-commerce titan Amazon and Snap Inc. soared in late trading on strong earnings. A tech index advanced in Hong Kong — which reopened from a prolonged holiday — helping to steady MSCI Inc.’s Asia-Pacific gauge. Japanese equities dipped.
The Nasdaq 100 fell the most since 2020 on Thursday, hurt by a historic $251 billion wipeout for Facebook owner Meta Platforms Inc. But Amazon could add nearly $200 billion in market value if the stock’s 14% gain in after-hours trading holds to Friday’s Wall Street close.
Meanwhile, surprisingly hawkish comments from European Central Bank President Christine Lagarde and a Bank of England interest-rate hike highlighted persistent concerns about high inflation.
That hurt sovereign debt: Japan’s five-year government bond yield increased to zero for the first time since 2016, following a jump in European yields and selling in Treasuries. The benchmark 10-year U.S. yield was around 1.84%.
The euro added to a rally and the dollar retreated. West Texas Intermediate oil stayed above $90 a barrel after scaling the mark for the first time since 2014.
The latest turbulence underscores how volatility has become the hallmark of global markets this year. Investors are trying to come to grips with less favorable monetary conditions just as the economic recovery from the pandemic show signs of moderating.
“The first half this year we are now experiencing a rates shock,” Tracy Chen, portfolio manager at Brandywine Global Investment Management, said on Bloomberg Television. “If the Fed and BOE and other EM central banks are too aggressive in hiking interest rates, potentially we are going to face kind of a recession risk in the second half, or at least more slowdown in the economy.”
The latest data showed U.S. service-sector growth pulled back in January to the slowest pace in nearly a year. Meanwhile, U.S. initial jobless claims fell more than expected last week to 238,000 ahead of data on payrolls Friday.
The looming jobs report “is a reminder that expectations for Fed policy are the key influence on this market right now,” wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. A hot inflation print next week would “rekindle hawkish Fed concerns,” he added.
For more market analysis, read our MLIV blog.
What to watch this week:
- U.S. payrolls report for January, Friday
- Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.9% as of 10:44 a.m. in Tokyo. The S&P 500 fell 2.4%
- Nasdaq 100 futures rose 1.5%. The Nasdaq 100 fell 4.2%
- Japan’s Topix index fell 0.4%
- Australia’s S&P/ASX 200 index shed 0.4%
- South Korea’s Kospi index increased 0.7%
- Hong Kong’s Hang Seng index rose 1.8%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was at $1.1449
- The Japanese yen was at 114.84 per dollar
- The offshore yuan was at 6.3571 per dollar
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.84%
- Australia’s 10-year bond yield rose seven basis points to 1.94%
Commodities
- West Texas Intermediate crude was at $90.77 a barrel, up 0.5%
- Gold was at $1,806.71 an ounce, up 0.1%
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