Wednesday, January 19

Stocks and Futures Start a New Quarter on a Risk Reduction Note: Markets Wrap Up


The first day of the final quarter of 2021 failed to cheer up investors who opposed the Federal Reserve’s mounting wall of concern that was reduced to stagflation and setbacks to US President Joe Biden’s big spending plans.

S&P 500 and Nasdaq 100 index futures each fell 0.5% after the underlying indicators ended September with the biggest declines since March 2020. European stocks headed for the worst weekly decline since January. Occidental Petroleum Corp. led premarket losses in New York as the oil rally stalled.

As investors prepare for the Fed to reduce its stimulus, fears are mounting of slower economic growth, high inflation, supply chain bottlenecks, a global energy crisis and regulatory risks emanating from China. A short-term deal that avoided a US government shutdown was overshadowed by concerns that the crisis could return in weeks and also delay Biden’s $ 4 trillion economic outlook.

“A difficult start to the quarter is inherited from the wobble in US equities amid a mosaic approach to avoid a fiscal cliff that conspires with growing fears of inflationary shocks accentuated by the fight for energy,” said Vishnu Varathan, chief economics officer. and Mizuho strategy. Bank Ltd. “The threat is not simply interrupted growth / recovery, but rather the amplification of the self-inflicted pain between US fiscal blunders and China’s regulatory turmoil.”

The dollar was stable on Friday, after a two-month rally fueled by the aggressive lean of the Fed. While macroeconomic risks are leading investors to the safety of the dollar, the currency is also benefiting from the divergence of policy, as the prospects for monetary tightening in the US contrast with the extreme restraint of the European Central Bank.

The European Stoxx 600 caliber spread losses as 19 of its 20 industrial subgroups declined. The energy crisis across the continent worsened and benchmark natural gas futures briefly rose to a record 100 euros ($ 116) per megawatt-hour. Subsequently, the contract was negotiated with a 2.5% drop.

Occidental Petroleum fell 2% in early New York trading. West Texas Intermediate crude failed to stay above the $ 75 per barrel mark, while Brent futures headed for a weekly loss. Some operations speculated that upward pressure on prices could return after China ordered its state-owned companies to secure energy supplies at all costs.

Stocks slumped in Japan and Australia, and a gauge for Asian stocks hit their lowest level in more than a month. China started a week-long holiday and the Hong Kong market was closed on Friday.

Treasuries were stable, with the 10-year yield below 1.50%. Bitcoin extended the recovery, trading around $ 44,800 each.

Here are some events to watch this week:

  • Michigan Sentiment Univ., ISM Manufacturing, US Construction Spending, Personal Income / Spending, Friday

Some of the main movements in the markets:

Stocks

  • The Stoxx Europe 600 fell 0.7% at 10:13 am London time.
  • S&P 500 futures fell 0.5%
  • Nasdaq 100 futures fell 0.5%
  • Dow Jones Industrial Average futures fell 0.6%
  • The MSCI Asia Pacific Index fell 1.1%
  • MSCI Emerging Markets Index fell 0.6%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro changed little to $ 1.1579
  • The Japanese yen rose 0.2% to 111.09 per dollar
  • The offshore yuan rose 0.2% to 6.4373 to the dollar.
  • The British pound changed little to $ 1.3483

Captivity

  • The 10-year Treasury yield changed little to 1.49%.
  • Germany’s 10-year yield fell three basis points to -0.23%.
  • The UK 10-year yield fell two basis points to 1.00%.

Raw Materials

  • Brent crude fell 0.6% to $ 77.81 a barrel
  • Spot gold fell 0.1% to $ 1,754.48 an ounce

© 2021 Bloomberg


www.moneyweb.co.za

Leave a Reply

Your email address will not be published. Required fields are marked *