Stocks and US equity futures reversed earlier declines on Monday as earnings expectations outweighed concerns about a possible recession.
S&P 500 and Nasdaq 100 futures rose, while European stocks extended gains after their best week since May. China’s property shares pushed higher amid a report that officials plan a fund to support struggling developers.
Treasury yields advanced and a dollar gauge Sipp investors are turning their focus to earnings of US big-tech companies as they await another Federal Reserve interest-rate hike of at least 75 basis points this week. The Fed will probably inflict more pain on the economy to get inflation under control, while the European Central Bank may also continue big interest-rate increases. ed. Oil also reversed earlier losses.
The Federal Reserve policy decision this week, along with earnings from the likes of Google’s Alphabet Inc. and technology titan Apple Inc., will help to clarify the outlook for a one-month-old rebound in stocks. Tech shares including Alphabet and Apple rose in pre-market trading.
“We still see further downside for risky assets as recession fears accumulate and central banks remain committed to fighting inflation at the expense of growth,” wrote Eric Robertsen, chief strategist at Standard Chartered Bank Plc.
In Europe, German business confidence deteriorated to the worst level since the early months of the pandemic on growing concerns that record inflation and limited energy supplies from Russia will throw Europe’s biggest economy into a downturn.
Bear-Market Blues
“We don’t think that this bear market is going to end until there’s some evidence of nearing a bottoming of economic data or a pivot by the Fed toward a more dovish stance,” Nadia Lovell, UBS Global Wealth Management senior US equity strategist, said on Bloomberg Radio.
Elsewhere, wheat climbed as commodity markets evaluated a Russian missile strike on Odesa’s sea port that threatened to test a fledgling agreement to unblock Ukrainian grain exports from the Black Sea.
Here are some key events to watch this week:
- Alphabet, Apple, Amazon, Microsoft, Meta earnings due this week
- Bank of Japan minutes, Tuesday
- IMF’s world economic outlook update, Tuesday
- EU energy ministers emergency meeting, Tuesday
- Fed policy decision, briefing, Wednesday
- Australia CPI, Wednesday
- US GDP, Thursday
- Euro-area CPI, Friday
- US consumer income, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.5% as of 7:20 a.m. New York time
- Futures on the Nasdaq 100 rose 0.5%
- Futures on the Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 0.2%
- The MSCI World index fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.3% to $1.0244
- The British pound rose 0.6% to $1.2075
- The Japanese yen fell 0.2% to 136.39 per dollar
Bonds
- The yield on 10-year Treasuries advanced five basis points to 2.80%
- Germany’s 10-year yield advanced two basis points to 1.05%
- Britain’s 10-year yield advanced one basis point to 1.95%
Commodities
- West Texas Intermediate crude rose 1% to $95.67 a barrel
- Gold futures were little changed
Source By: Bloomberg