(Bloomberg) -- U.S. index futures drifted lower and European stocks dropped as investors awaited a possible Federal Reserve interest-rate cut and some of the season’s biggest corporate earnings. Treasuries edged higher and most European bonds rose.
Contracts on the S&P 500 nudged down a day after the U.S. equity benchmark hit a record, and ahead of results from drug giants Pfizer Inc. and Merck & Co. The Stoxx Europe 600 Index slipped after six straight sessions of gains, led lower by energy producers. BP Plc shares declined even as the driller’s profit beat estimates. In Asia, Japan’s Topix benchmark closed at a 2019 high, while equities dropped in Hong Kong and Shanghai.
Yields on Japanese 10-year bonds hit the highest since June and their Australian counterparts jumped almost nine basis points, while peers in the U.S. and Germany halted a surge that’s lasted several days.
Investors are struggling to find fresh impetus to extend the record-breaking rally in U.S. stocks. Optimism on the China trade front from President Donald Trump is aiding the bull case, and an anticipated Fed rate cut on Wednesday may add further fuel. Still, recent data has come in mixed and while corporate earnings are topping estimates on average, the bar has been set low.
“What we’ve had happening in markets in the last few weeks is a lifting of that perceived uncertainty” about U.S.-China trade and Brexit, with central bank easing providing a lift, Sue Trinh, a global macro strategist at Manulife Investment Management, told Bloomberg TV. “The real risk is that we’re seeing a boost to asset prices but no real uptick in the real economy,” she said.
Meanwhile, the pound weakened as U.K. Prime Minister Boris Johnson said he’ll keep pushing for an early election despite failing for a third time to trigger a snap poll. In metals, spot palladium slipped after a record close Monday.
Here are some key events coming up this week:
Earnings include: Pfizer and Merck on Tuesday; Airbus, Apple, Credit Suisse, Facebook and PetroChina on Wednesday; Mitsubishi Heavy on Thursday; Exxon Mobil and Macquarie Group on Friday.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday.U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday. The Fed’s preferred inflation metric, the core PCE deflator, is due Thursday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.
These are some of the main moves in markets:
Stocks
Futures on the S&P 500 Index fell 0.1% as of 6:29 a.m. New York time.The Stoxx Europe 600 Index sank 0.5%.Japan’s Topix index climbed 0.9%.India’s Sensex Index surged 1.5%.
Currencies
The Bloomberg Dollar Spot Index rose 0.1%.The U.K. pound weakened 0.1% to 86.411 pence per euro.The euro decreased 0.2% to $1.1075.The South Korean Won jumped 0.6% to 1,163.19 per dollar.
Bonds
The yield on 10-year Treasuries declined two basis points to 1.83%.Britain’s 10-year yield decreased three basis points to 0.696%.Germany’s 10-year yield fell two basis points to -0.35%.Australia’s 10-year yield jumped nine basis points to 1.1855%.
Commodities
The Bloomberg Commodity Index dipped 0.2%.Gold was little changed at $1,492.50 an ounce.West Texas Intermediate crude decreased 1.3% to $55.07 a barrel.
--With assistance from Andreea Papuc, Tian Chen and Livia Yap.
To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil
For more articles like this, please visit us at bloomberg.com
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https://news.yahoo.com/stocks-slip-ahead-earnings-fed-083259622.html
2019-10-29 08:32:00Z
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