Stock Futures Based on S&P 500 Index's Record Advance: Markets Wrap

(Bloomberg) — European and U.S. stock futures rose, extending a global equity rally that pushed the S&P 500 to a record high on Friday.

Most read from Bloomberg

Futures rose in Asia after gains in technology stocks boosted the S&P 500 index after it surpassed 4,800 last week amid optimism about expected interest rate cuts from the Federal Reserve and an artificial intelligence boom. Chinese stocks bucked the trend as pessimism over the country's faltering recovery led to increased losses.

“We are heading toward an environment where the economic slowdown looks more like a soft landing, and at the same time we are talking about interest rate cuts,” said Jun-Pei Liu, a fund manager at Tribeca Investment Partners in Sydney. “All of this together looks very positive for the stock market.”

After hitting its lowest point in October 2022, the S&P 500 rose about 35% and surpassed its previous closing high of 4,796.56 on Friday. The gauge became the last of the three major US stock indexes to close at a record high.

The main Asian stock index erased earlier gains as the Hang Seng fell 3% and benchmark indices in mainland China fell. Chinese commercial lenders kept their key lending rates unchanged on Monday, in line with the central bank's decision last week to refrain from lowering borrowing costs.

Current low valuations for Chinese stocks are not enough to encourage investors to return to the markets, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp in Singapore. “Our suspicion is that they will provide more stimulus, but the question is whether it will be large enough to appease the markets,” he said of Chinese policymakers.

The story continues

Oil prices fell as OPEC member Libya resumed production in its largest field, boosting global supplies and for now outweighing concerns about tensions in the Red Sea that appear set to continue disrupting shipping.

The dollar fell against most of its G10 peers, slightly paring the gains it achieved earlier this month. Treasuries rose, with the benchmark 10-year yield falling 1 basis point. Benchmark securities rose on Friday as a “Fed-friendly” poll by the University of Michigan showed a mix of high consumer confidence and lower inflation expectations.

Investors will set their sights this week on the Bank of Japan, which began its two-day policy meeting on Monday. The central bank is overwhelmingly expected to leave its settings unchanged on Tuesday when it announces the results of its meeting.

Also in focus are the first US Q4 GDP estimate on Thursday, central bank meetings for Canada and Europe, along with South Korea's economic output data and European preliminary 2024 purchasing managers' survey readings.

Elsewhere, Ron DeSantis withdrew from the US presidential race to support Republican front-runner Donald Trump ahead of the New Hampshire primary on Tuesday.

Main events this week:

• Leading US Conference Board Index, Monday

• Bank of Japan interest rate decision, Tuesday

• Consumer confidence in the euro zone, Tuesday

• Netflix Inc. will announce its profits; The streaming service is set to announce a strong finish to 2023, Tuesday

• Japanese Trade, Wednesday

• Eurozone Purchasing Managers' Index (PMI) for global services and manufacturing, Wednesday

• UK S&P Global/CIPS Manufacturing PMI, Wednesday

• US Services and Manufacturing Purchasing Managers' Index (S&P), Wednesday

• Tesla Inc and International Business Machines Corp (IBM) will report earnings on Wednesday

• European Central Bank interest rate decision, Thursday

• Germany Ifo Business Climate, Thursday

• US GDP, Initial Jobless Claims, Durable Goods, Wholesale Inventories, New Home Sales, Thursday

• LVMH, Northrop Grumman Corp. and SK Hynix report earnings on Thursday

• Japan, Tokyo Consumer Price Index, Friday

• The Bank of Japan releases policy meeting minutes on Friday

• US Personal Income and Spending, Friday

• In China, the peak holiday begins before the Lunar New Year next month, on Friday

Stores

• S&P 500 futures rose 0.2% as of 7:02 a.m. London time. The S&P 500 rose 1.2% on Friday

• Nasdaq 100 futures rose 0.6%. Nasdaq 100 index rises 2%

• Euro Stoxx 50 futures rose 0.6%.

• Japan's Topix index rose 1.4%

• The Hang Seng Index in Hong Kong fell by 2.7%.

• China's Shanghai Composite Index fell by 2.7%

• Australia's S&P/ASX 200 rose 0.7%.

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0902

• There was little change in the Japanese yen at 148.09 to the dollar

• There was no significant change in the yuan in external transactions at 7.2053 to the dollar

• The Australian dollar fell 0.2 percent to $0.6585

• There was little change in the pound sterling at $1.2708

Digital currencies

• Bitcoin fell 1.4% to $41,158.99

• Ethereum fell 1.8% to $2,427.22

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.12%.

• The yield on 10-year Japanese bonds fell by 1.5 basis points to 0.650%.

• The Australian 10-year bond yield fell 6 basis points to 4.23%.

Goods

• West Texas Intermediate crude fell 0.4% to $73.13 a barrel

• Gold in spot transactions fell 0.5 percent to $2,019.38 per ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Garfield Reynolds.

(An earlier version of this story was corrected to fix reference to Lunar New Year in the list of major events)

Most read from Bloomberg Businessweek

©2024 Bloomberg L.P