(Bloomberg) — Global markets remained on edge Tuesday as investors braced for a heightened risk of global recession, even as dip buyers emerged.
(Bloomberg) — Global markets remained on edge Tuesday as investors braced for a heightened risk of global recession, even as dip buyers emerged.
Most stocks rose as Goldman Sachs Group Inc. and BlackRock Inc. soured on equities for the short term and Citigroup Inc. said bearish positioning continues to rise. Tech giants including Apple Inc., Amazon.com Inc. and Alphabet Inc. advanced in premarket trading as US index futures rebounded with Europe’s Stoxx 600.
Pressure on bonds eased after the worst selloff in decades, with the benchmark 10-year Treasury yield retreating from the highest level since 2010. The dollar gauge held near a record high set Monday, when Federal Reserve officials repeated hawkish comments on policy.
UK markets clawed back some losses even after Chancellor of the Exchequer Kwasi Kwarteng vowed to stay the course on his economic strategy that triggered the market meltdown late last week. Gilt yields slipped following the biggest-ever surge and the pound rose about 1% after falling to a record low.
Still, the country’s stock and bond markets have lost at least $500 billion in combined value since Liz Truss took over as Prime Minister and traders remained wary of the risk that the currency could slump to parity with the dollar after the Bank of England indicated it may not act before November to stem the rout.
Read More: Everything-Selloff on Wall Street Deepens on 98% Recession Odds
Volatility across markets was also reflected by the risk of future price swings, which reached the highest since the beginning of the pandemic, as shown by a Bank of America index.
Meanwhile, Germany suspects the damage to the Nord Stream pipeline system used to transport Russian gas to Europe was the result of sabotage. Benchmark European gas prices climbed as much as 12% on Tuesday, after four days of losses. Oil and gold also rose.
The turmoil in markets shows little sign of turning Fed officials away from hawkish rhetoric. Boston Fed President Susan Collins and her Cleveland counterpart Loretta Mester said additional tightening is needed to rein in stubbornly high inflation and Atlanta Fed President Raphael Bostic also said the central bank still has a ways to go to control inflation.
The latest data showed US durable goods orders fell 0.2% in August.
Read More: Fed Officials Say That Tackling Inflation Is Their No. 1 Job
“The market is pricing in some Fed increases, but we’re a bit worried that it might not be pricing in everything,” Laila Pence, president of Pence Wealth Management, said on Bloomberg Television. “Everyone is nervous.”
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Key events this week:
- US new home sales, Conference Board consumer confidence, durable goods, Tuesday
- Fed Chair Jerome Powell and Charles Evans speak at events, Tuesday
- Fed’s Mary Daly, Rafael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
- Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
- US initial jobless claims, GDP, Thursday
- Fed’s Loretta Mester, Mary Daly speak at events, Thursday
- China PMI, Friday
- Euro zone CPI, unemployment, Friday
- US consumer income , University of Michigan consumer sentiment, Friday
- Fed’s Lael Brainard and John Williams speak, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 1.3% as of 8:32 a.m. New York time
- Futures on the Nasdaq 100 rose 1.5%
- Futures on the Dow Jones Industrial Average rose 1%
- The Stoxx Europe 600 rose 0.8%
- The MSCI World index fell 1.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro rose 0.3% to $0.9641
- The British pound rose 1% to $1.0801
- The Japanese yen rose 0.2% to 144.48 per dollar
Cryptocurrencies
- Bitcoin rose 6.1% to $20,283
- Ether rose 5.1% to $1,392.82
Bonds
- The yield on 10-year Treasuries declined 11 basis points to 3.82%
- Germany’s 10-year yield declined three basis points to 2.09%
- Britain’s 10-year yield declined five basis points to 4.20%
Commodities
- West Texas Intermediate crude rose 1.3% to $77.70 a barrel
- Gold futures rose 0.8% to $1,646.30 an ounce
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