A rally in US equity futures signaled an extension of gains on Wall Street, with Goldman Sachs Group Inc. the latest to provide investors with positive earnings news. The pound and UK gilts weakened after the Bank of England denied a report it’s delaying the sale of government bonds until markets are calmer.
(Bloomberg) — A rally in US equity futures signaled an extension of gains on Wall Street, with Goldman Sachs Group Inc.
the latest to provide investors with positive earnings news. The pound and UK gilts weakened after the Bank of England denied a report it’s delaying the sale of government bonds until markets are calmer.
Contracts on the S&P 500 climbed 2% after the underlying gauge closed above a key technical support level on Monday.
Those on the Nasdaq 100 were up 2.2%. Goldman gained in premarket after better-than-expected third-quarter results. European stocks rose for a fourth day.
A Bloomberg gauge of the greenback was steady, while the pound weakened by 0.4% after the BOE said a Financial Times report that the central bank is pushing back the start of its quantitative tightening was “inaccurate.” Treasury yields dropped.
Sentiment toward risk assets has been buoyed by positive company results, cheaper valuations that enticed buyers and after policy reversals soothed concerns about UK markets.
But with headwinds from inflation, risks to the economy and hawkish central banks continuing to confront investors, there’s debate over how durable the gains will prove.
“There’s still a strong feeling of a bear market rally about trading over the course of the last week,” said Craig Erlam, senior market analyst at Oanda Europe Ltd.
“The economic landscape looks treacherous and we don’t even know if we’re at peak inflation and interest rate pricing yet. Those are substantial headwinds that will make any stock market rebound extremely challenging.”
Bank of America Corp.
said sentiment on stocks and global growth among fund managers it surveyed shows full capitulation, opening the way to an equities rally in 2023. The bank’s monthly global fund manager survey “screams macro capitulation, investor capitulation, start of policy capitulation,” strategists led by Michael Hartnett wrote in a note on Tuesday.
They expect stocks to bottom in the first half of next year after the Federal Reserve finally pivots away from raising interest rates.
The yen paused in its run toward the closely watched 150 per dollar level, which has investors on high alert for possible intervention.
Japanese Finance Minister Shunichi Suzuki said he was watching market moves with a sense of urgency.
Elsewhere in markets, oil switched between gains and losses as traders weighed a tight market against concerns over a global economic slowdown.
Gold also fluctuated and Bitcoin continued to trade below $20,000.
Key events this week:
- US industrial production, NAHB housing market index, Tuesday
- Fed’s Neel Kashkari speaks, Tuesday
- Euro area CPI, Wednesday
- EIA crude oil inventory report, Wednesday
- US MBA mortgage applications, building permits, housing starts, Fed Beige Book, Wednesday
- Fed’s Neel Kashkari, Charles Evans, James Bullard speak, Wednesday
- US existing home sales, initial jobless claims, Conference Board leading index, Thursday
- Euro area consumer confidence, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 2% as of 8:26 a.m.
New York time
- Futures on the Nasdaq 100 rose 2.2%
- Futures on the Dow Jones Industrial Average rose 1.8%
- The Stoxx Europe 600 rose 1.1%
- The MSCI World index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $0.9839
- The British pound fell 0.4% to $1.1312
- The Japanese yen was little changed at 149.11 per dollar
Cryptocurrencies
- Bitcoin rose 0.3% to $19,592.21
- Ether was little changed at $1,328.88
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.98%
- Germany’s 10-year yield advanced one basis point to 2.28%
- Britain’s 10-year yield was little changed at 3.98%
Commodities
- West Texas Intermediate crude rose 0.3% to $85.72 a barrel
- Gold futures fell 0.3% to $1,659.20 an ounce
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