(Bloomberg) — Stocks advanced as global markets steadied after turbulence driven by misfiring bets over the scale and timing of interest rate cuts by the Federal Reserve.
Most Read from Bloomberg
US futures pointed to the S&P 500’s first gains in five days at the Wall Street open. The dollar steadied, while US Treasuries pared an earlier gain to trade flat.
Investors are unwinding gains from a record rally in the first quarter as they come to grips with a resilient US economy and stubborn inflation that’s forced them to recalibrate rate bets. Money markets signal just two rate cuts by the Fed this year, starting in September, after a fresh round of hot inflation sent Treasury yields soaring to 2024 highs.
Offsetting disappointment about the speed of rate cuts, though, investors are more optimistic about growth and the potential feedthrough to corporate profits, according to Peter Oppenheimer, global equity strategy chief at Goldman Sachs Group Inc.
“Growth is fine, but we’re not likely to get the boost in terms of lower rates that the markets had expected,” Oppenheimer said in an interview with Bloomberg TV. “That’s causing some indigestion, so earnings will really be crucial here.”
Reports from Netflix Inc. and L’Oreal SA are due after the close of their respective markets. Investors will also be parsing initial US jobless data and speakers from a raft of central banks.
In currency markets, the yen was steady following a joint statement from US Treasury Secretary Janet Yellen alongside the finance ministers of Japan and South Korea that noted “serious concerns” about the depreciation of the two Asian currencies. A global gauge of emerging-market currencies gained for a second day, suggesting some stability after hitting a 2024 low earlier this week.
The dollar has jumped about 4% this year, outperforming all major currencies, as reduced prospects for Fed rate cuts feed greenback strength and higher US yields.
Elsewhere, oil held onto most of Wednesday’s 3% decline, weighed by weaker Chinese industrial data and a swelling in US crude inventories, while gold rose.
Corporate Highlights:
-
Taiwan Semiconductor Manufacturing Co. reported its first profit rise in a year, after strong AI demand revived growth at the world’s biggest contract chipmaker.
-
Blackstone Inc. collected more fees from big retail funds and credit strategies this year, compensating for the slower pace of deal exits, the asset manager said in its first-quarter report.
-
Micron Technology Inc. is poised to get $6.1 billion in grants from the Commerce Department to help pay for domestic factory projects, part of an effort to bring semiconductor production back to American soil.
-
Las Vegas Sands Corp. said renovations at an entertainment center and a hotel in Macau will crimp results this year, sending the shares lower in extended trading.
-
ABB Ltd. rallied as it raised its profitability outlook for the year after stronger-than-expected orders led by demand in electrification products helped offset declines in China.
Key events this week:
-
US Conf. Board leading index, existing home sales, initial jobless claims, Thursday
-
Fed Governor Michelle Bowman speaks, Thursday
-
New York Fed President John Williams speaks, Thursday
-
Atlanta Fed President Raphael Bostic speaks, Thursday
-
BOE Deputy Governor Dave Ramsden and ECB Governing Council member Joachim Nagel speak, Friday
-
Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
-
S&P 500 futures rose 0.2% as of 7:27 a.m. New York time
-
Nasdaq 100 futures rose 0.3%
-
Futures on the Dow Jones Industrial Average rose 0.2%
-
The Stoxx Europe 600 rose 0.1%
-
The MSCI World index rose 0.2%
Currencies
-
The Bloomberg Dollar Spot Index was little changed
-
The euro was little changed at $1.0674
-
The British pound rose 0.2% to $1.2476
-
The Japanese yen was little changed at 154.46 per dollar
Cryptocurrencies
-
Bitcoin rose 3.4% to $62,951.38
-
Ether rose 3% to $3,060.61
Bonds
-
The yield on 10-year Treasuries was little changed at 4.58%
-
Germany’s 10-year yield was little changed at 2.47%
-
Britain’s 10-year yield declined three basis points to 4.24%
Commodities
-
West Texas Intermediate crude fell 0.9% to $81.95 a barrel
-
Spot gold rose 0.8% to $2,380.94 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Sujata Rao, Francine Lacqua, Catherine Bosley and Kwaku Gyasi.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
