US stock futures fall

(Bloomberg) — U.S. stocks are poised to extend their retreat as Treasury yields near their highest levels this year, fueling concerns about tighter monetary policy.

Most Read from Bloomberg

Futures for the S&P 500 fell 0.5%, marking a second day of declines. Salesforce Inc fell 17% in premarket trade as sales growth slowed. Europe’s Stoxx 600 benchmark was led by telecom and banking stocks. Ten-year Treasury yields were steady after rising about 15 basis points in the past two days.

Global stocks are heading for their worst week since mid-April as US rate cut expectations keep inflation still clinging. Another tepid U.S. bond results on Wednesday heightened concerns that financing the U.S. deficit will raise yields at a time when the central bank is not on emergency policy.

The rest of the data this week will be important as investors refine their monetary policy outlook: U.S. gross domestic product numbers will be released later Thursday, which will be lower than the initial print, and central bank officials, including New York Fed President John Williams and Atlanta Fed President Raphael, are expected to speak. Inflation reports from the US and Europe are due on Friday.

As confidence in U.S. rate cuts fades, U.S. Treasuries are sticking to the front end and belly of the curve, according to Karim Sedit, head of EMEA investment strategy at BlackRock International Ltd.

“In terms of returns to stability, we see it as the area where you’re still making the most money,” he said in an interview with Bloomberg Television.

A fiery rally in tech companies is underpinned by fundamentals, with BlackRock among its “key sector overweights,” Chedid says, adding that he sees increased inflows in European and Japanese stocks.

The prospect of an interest rate cut at the European Central Bank’s June meeting is helping, Cedit said, adding that “the macro data in Europe is bottoming out, which investors want.” “Earnings in Europe have seen significant improvement over the past 12 months.”

Rand slides

Elsewhere, the rand extended losses and bank shares fell as South Africa’s election turnout rose. For the first time since the ruling party came to power, it has not been able to get a parliamentary majority.

The story continues

South Africa’s ANC may lose national majority, model shows

In commodities, crude fell as traders looked to U.S. stockpiles data and the OPEC+ meeting at the weekend for further clarity on the supply and demand outlook.

Company Highlights:

• Goldman Sachs analysts initiated coverage on six large-cap drug stocks on Thursday. They gave buy ratings to AstraZeneca Plc, Novo Nordisk A/S and Novartis AG, and are neutral on GSK Plc and Bayer AG. Roche Holding AG is their only sell rating.

• China is poised to impose a record fine on PricewaterhouseCoopers LLP and suspend some local operations of the global auditor over its role in one of the country’s biggest financial fraud cases.

• Luxury sneaker brand Golden Goose Group Spa launches a Milan initial public offering, Italy’s largest listing in a year.

• Saudi Arabia is preparing to formally launch a secondary stake in oil major Aramco as soon as Sunday, a deal that could raise more than $10 billion and would be the largest of its kind in recent years.

• Brookfield is in exclusive talks to buy a majority stake in Neoen SA in the French renewable energy developer valued at around €6.1 billion.

Highlights of this week:

• US Initial Jobless Claims, GDP, Thursday

• The Fed’s John Williams and Lori Logan speak Thursday

• Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday

• China’s official manufacturing and non-manufacturing PMI, Friday

• Eurozone CBI, Friday

• US consumer income, spending, PCE deflator, Friday

• The Fed’s Raphael Bostic speaks on Friday

Some key movements in the markets:

Shares

• S&P 500 futures were down 0.4% at 6:40 a.m. New York time

• Nasdaq 100 futures fell 0.3%

• Futures for the Dow Jones industrial average fell 0.9%

• The Stoxx Europe 600 rose 0.3%

• The MSCI World Index was little changed

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.2% to $1.0818

• The British pound was up 0.2% at $1.2721

• The Japanese yen rose 0.5% to 156.93 per dollar

Cryptocurrencies

• Bitcoin rose 0.6% to $67,800.1

• Ether fell 0.5% to $3,729.32

Bonds

• The yield on 10-year Treasuries fell two basis points to 4.59%.

• Germany’s 10-year yield fell two basis points to 2.67%

• Britain’s 10-year yield fell three basis points to 4.37%

materials

• West Texas Intermediate crude was down 0.4% at $78.91 a barrel.

• Spot gold was down 0.2% at $2,334.32 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Masaki Kondo and Chiranjeevi Chakraborty.

Most read from Bloomberg Businessweek

©2024 Bloomberg LP