(Bloomberg) — U.S. equity futures wavered and Treasuries were steady Friday as traders awaited a key jobs report that could stoke expectations for a quicker reduction in Federal Reserve stimulus.
S&P 500 and Nasdaq 100 contracts fluctuated, while European futures rose. Dip-buyers Thursday fueled the S&P 500’s best climb since mid-October, a sign that some of the worst fears about the omicron virus strain are dissipating.
Most Asian stocks advanced, led by Japan. But in Hong Kong, a gauge of Chinese tech firms slid. Investors were spooked by ride-hailing giant Didi Global Inc.’s plan to delist from the U.S. under pressure from Beijing, and growing scrutiny of Chinese firms traded in America.
Treasury yields held most of a jump from the U.S. session, where Fed officials laid out the case for a faster removal of policy support amid high inflation. The dollar climbed. Crude advanced after OPEC+ proceeded with an output hike but left room for quick adjustments due to a cloudy outlook.
Volatility across assets remains elevated, reflecting the Fed’s shift toward less generous monetary settings and uncertainty about how the omicron outbreak will affect global reopening. The hope is that vaccines will remain effective or can be adjusted to cope. New York state identified at least five cases of omicron, which is continuing its worldwide spread.
“The environment in markets is changing,” Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. “Monetary policy, fiscal policy are all losing steam. It doesn’t mean a down market. But it’s not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year.”
Fed Views
Fed Governor Randal Quarles, Atlanta Fed President Raphael Bostic and his San Francisco counterpart Mary Daly explained the rationale for tapering bond purchases more rapidly. That reinforced a similar message from Chair Jerome Powell this week.
In the latest U.S. data, jobless claims remained low, suggesting additional progress in the job market. Traders are awaiting payrolls numbers Friday, which could shape expectations for the pace of Fed policy tightening. Bloomberg Economics expects a strong report.
Elsewhere, developer Kaisa Group Holdings Ltd. sank in Hong Kong after failing to win approval for a debt swap, underscoring China’s property-sector woes. Grab Holdings Ltd., Southeast Asia’s biggest ride-hailing and delivery company, tumbled in its first day of U.S. trading.
Elon Musk sold an additional $1 billion worth of Tesla Inc. shares to satisfy tax withholding obligations related to the exercise of stock options.
Key events to watch this week:
U.S. jobs report, factory orders, durable goods on Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures were steady as of 7:30 a.m. in London. The S&P 500 rose 1.4%
Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 0.7%
Japan’s Topix index rose 1.6%
Australia’s S&P/ASX 200 index added 0.2%
South Korea’s Kospi increased 0.8%
Hong Kong’s Hang Seng index lost 0.5%
China’s Shanghai Composite climbed 0.9%
Euro Stoxx 50 futures rose 0.6%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was at $1.1285
The Japanese yen was at 113.32 per dollar, down 0.2%
The offshore yuan was at 6.3719 per dollar
Bonds
The yield on 10-year Treasuries was at 1.44%
Australia’s 10-year yield fell seven basis points to 1.61%
Commodities
West Texas Intermediate crude rose 1.9% to $67.74 a barrel
Gold was at $1,771 an ounce, up 0.1%
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