All Things Newz
Business

Dollar Gains, Futures Slip as China Clouds Outlook: Markets Wrap


U.S. equity-index futures slipped, the dollar gained and commodities from oil to iron ore tumbled as disappointing data from China further clouded the outlook for the global economy.

Article content

(Bloomberg) — U.S. equity-index futures slipped, the dollar gained and commodities from oil to iron ore tumbled as disappointing data from China further clouded the outlook for the global economy.

Advertisement 2

Article content

Contracts on both the S&P 500 and Nasdaq 100 were lower, suggesting a four-week stocks rally may stall when US markets open. Treasury yields fell and the bond curve remained deeply inverted, pointing to worries that the Federal Reserve’s campaign of monetary tightening against high inflation will spark a US recession. The latest New York state manufacturing data added to those concerns.

Europe’s equity benchmark reversed an early gain as energy companies and miners declined, while bonds in the region rose. An Asian share index added 0.2% and emerging-market stocks dropped.

Equity markets in recent weeks have drawn succor from signs of slowing price pressures, which stirred hopes of a shift by the Fed to less aggressive rate hikes. But China’s faltering economy shows many hurdles still lie ahead for a near-13% rebound in global stocks from June bear-market lows. 

Advertisement 3

Article content

Meanwhile, a gauge of New York state manufacturing activity plunged by the second-most in data back to 2001, a report showed Monday, with sharp declines in orders and shipments indicating an abrupt downturn in demand. And in the euro area, the risk of a recession has reached the highest level since November 2020, according to economists polled by Bloomberg.

“It’s been an underwhelming start to the week in financial markets with the eternal optimism of investors clashing with the reality of Chinese economic data,” said Craig Erlam, a senior market analyst at Oanda Europe Ltd. Investors have shown “a ​ bizarre willingness to turn a blind eye to the economic reality at the moment as long as the Fed doesn’t raise rates too fast,” though that’s not sustainable, he said.

Advertisement 4

Article content

Oil shed more than 5%, while iron ore, copper and other metals declined amid mounting concerns that China’s sluggish recovery will curb demand for raw materials. Gold retreated below $1,800 an ounce and Bitcoin hovered above $24,000.

Data showed China’s July retail sales, investment and industrial output missed economists’ estimates. The central bank had earlier cut borrowing costs. China’s bond yields and the offshore yuan fell, while its bourses wavered.

Here are some key events to watch this week:

  • Earnings include Walmart, Target, Home Depot, Tencent
  • Hedge funds’ 13F filings, Monday
  • Federal Reserve July minutes, Wednesday
  • New Zealand rate decision, Wednesday
  • UK CPI, US retail sales, Wednesday
  • Australia unemployment, Thursday
  • U.S. existing home sales, initial jobless claims, Conference Board leading index, Thursday
  • Fed’s Esther George, Neel Kashkari speak at separate events, Thursday

Advertisement 5

Article content

Some of the main moves in markets:

Stocks

  • Futures on the S&P 500 fell 0.7% as of 8:43 a.m. New York time
  • Futures on the Nasdaq 100 fell 0.4%
  • Futures on the Dow Jones Industrial Average fell 0.6%
  • The Stoxx Europe 600 fell 0.1%
  • The MSCI World index was little changed

Currencies

  • The Bloomberg Dollar Spot Index rose 0.5%
  • The euro fell 0.6% to $1.0198
  • The British pound fell 0.4% to $1.2088
  • The Japanese yen rose 0.5% to 132.72 per dollar

Bonds

  • The yield on 10-year Treasuries declined five basis points to 2.79%
  • Germany’s 10-year yield declined eight basis points to 0.91%
  • Britain’s 10-year yield declined eight basis points to 2.03%

Commodities

  • West Texas Intermediate crude fell 5.3% to $87.17 a barrel
  • Gold futures fell 0.9% to $1,798.50 an ounce

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Related posts

BOJ maintains ultra-low rates, warns it is closely watching yen moves

U.S. manufacturing activity shows signs of peaking: Kemp

Apple suppliers to make Apple Watch and MacBook in Vietnam – Nikkei