US stock futures buck rebound in Europe and Asia

The Stoxx Europe 600 Index, which on Thursday dropped the most since the UK voted to leave the EU in 2016, jumped as every sector rallied.

Dec 07, 2018 11:12 IST India Infoline News Service

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European stocks rebounded from the worst day in more than two years and Asian shares posted modest gains as investors sought to end a bruising week on a more upbeat note. Signs of stress remained, however, as US equity futures declined and Treasuries rose.

The Stoxx Europe 600 Index, which on Thursday dropped the most since the UK voted to leave the EU in 2016, jumped as every sector rallied. S&P 500 futures came off their lows as the European session wore on, but remained in the red for a second day.

Japanese equities outperformed as most Asian gauges nudged higher. Italian debt climbed as European bonds largely drifted. The dollar edged up and the pound fell as U.K. Prime Minister Theresa May was said to be weighing a plan to postpone the vote on her Brexit deal.

Financial markets remain on tenterhooks amid worries the trade truce between China and the US won’t last after the arrest of the chief financial officer of Huawei. As investors start to doubt the Federal Reserve will raise rates in 2019, JPMorgan Chase & Co. CEO Jamie Dimon said while the focus has been on the central bank moving too quickly, there’s also a risk it does too little, too slowly.

For his part, Fed Chair Jerome Powell delivered a bullish assessment of the US economy and the job market ahead of Friday’s labor report. It comes as market-implied US rate expectations crumble amid the tumult in equities.

“The big question mark still is what’s going to happen in 2019” with the Fed, Omar Aguilar, CIO of equities and multi-asset strategies at Charles Schwab, told Bloomberg TV. “The jobs report could easily be the catalyst that will tell us a little more about what the path may be.”

Elsewhere, West Texas oil pared a drop to trade little changed as OPEC struggled to reach a deal on oil-production cuts. Cryptocurrencies continued their slide with a fresh bout of losses after US regulators dashed hopes that a Bitcoin exchange-traded fund would appear before the end of this year.

Here are the main moves in markets:

Stocks
  • Futures on the S&P 500 Index dipped 0.4% as of 11:07 AM London time, to the lowest in more than a week.
  • The Stoxx Europe 600 Index gained 1.3%, the biggest rise in more than five weeks.
  • The UK’s FTSE 100 Index increased 1.6%, the largest climb in 11 weeks.
  • Germany’s DAX Index gained 0.7%.
  • The MSCI Asia Pacific Index rose 0.2%.
  • The MSCI Emerging Market Index climbed 0.3%.

Currencies
  • The Bloomberg Dollar Spot Index increased 0.1%.
  • The euro was unchanged at $1.1374, the strongest in more than a week.
  • The British pound declined 0.2% to $1.2761.
  • The Japanese yen decreased 0.1% to 112.81 per dollar.

Bonds
  • The yield on 10-year Treasuries fell one basis point to 2.89%, hitting the lowest in three months with its seventh straight decline.
  • Germany’s 10-year yield rose two basis points to 0.25%, the biggest advance in more than a week.
  • Britain’s 10-year yield increased two basis points to 1.266%.
  • The spread of Italy’s 10-year bonds over Germany’s declined eight basis points to 2.8871 percentage points.

Commodities
  • West Texas Intermediate crude rose 0.3% to $51.62 a barrel.
  • Gold climbed 0.3% to $1,241.44 an ounce, the highest in 21 weeks.

Source: Bloomberg

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