Stocks Rise With Payrolls Set to Cap Volatile Week: Markets Wrap

(Bloomberg) — Stocks rose ahead of Friday’s key US jobs data, at the end of a volatile week in which mixed earnings from tech megacaps had the market on the defensive. Oil gained amid renewed tension in the Middle East.

Amazon.com Inc. and Intel Corp. shares surged in premarket trading on optimistic earnings results, while Apple Inc. declined after reporting softer demand in China. Futures on the S&P 500 edged higher, with the benchmark on track for its worst weekly performance in more than a year amid unease over the outlook for artificial intelligence and cloud computing following results from Microsoft Corp. and Meta Platforms Inc. 

Today’s payrolls report could show job growth weakening, after an inflation measure favored by the Federal Reserve yesterday posted its biggest monthly gain since April. That muddied the water ahead of next week’s Federal Reserve policy meeting, with the swaps market pricing in 20 basis points of easing, down from 24 at the start of the week.

Investors are also bracing for next week’s US election, with the so-called Fear Gauge – the CBOE Volatility Index — rising to levels last seen during the August market upheaval.

The “highly anticipated employment report, a busy week of earnings that includes a handful of the Magnificent Seven names, rising yields and, of course, next week’s U.S. election are all contributing to building angst in the market, not to mention the FOMC meeting,” said Adam Turnquist, chief technical strategist at LPL Financial. “We may need to wait until after Election Day for volatility to normalize as the VIX futures curve points to potential elevated near-term turbulence for stocks.”

The Stoxx Europe 600 index advanced 0.6%, though it remains on track for its biggest weekly drop in two months. Gains for energy stocks helped prop up the gauge, with oil majors Shell Plc, Total Energies SE and BP Plc adding more than 1%. Reckitt Benckiser Group Plc soared 10% after a unit of the household goods company was cleared by a jury over claims it hid health risks of its premature-infant formula.

UK bonds fell, extending losses this week after the Labour government’s pivotal budget and plans for additional bond sales unleashed a wave of selling.

US Treasuries were steady after minor gains Thursday. But October was the worst month for Treasuries in two years after the heavy selling of the past few weeks that reflected a rethink on US interest rates given signs of resilience in the economy. 

An index of dollar strength rebounded after two days of declines. The yen weakened after climbing as much as 1% against the greenback Thursday. The gains followed comments from Bank of Japan Governor Kazuo Ueda that currency markets have had a major impact on the economy.

An Asia equity index fell, on course for its longest weekly losing streak in more than two years. It was dragged by sluggish earnings in the region and tech stock declines that mirrored selling pressure on Wall Street overnight. 

Japanese stocks led losses in the region, while the benchmarks in Australia and South Korea also slipped. Chinese equities rose after improving property sales data and a separate survey revealing the country’s manufacturing activity unexpectedly picked up last month — both of which signaled that Beijing’s recent stimulus measures are beginning to take hold.

Oil extended gains after Axios reported that Iran is planning a major retaliatory strike on Israel through the militias it backs in Iraq. West Texas Intermediate traded above $71 a barrel.

Key events this week:

• US employment, ISM manufacturing, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.6% as of 9:40 a.m. London time
• S&P 500 futures rose 0.3%
• Nasdaq 100 futures rose 0.3%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index fell 0.6%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0861
• The Japanese yen fell 0.5% to 152.73 per dollar
• The offshore yuan fell 0.1% to 7.1304 per dollar
• The British pound rose 0.1% to $1.2915

Cryptocurrencies

• Bitcoin fell 0.7% to $69,473.23
• Ether fell 0.5% to $2,506.28

Bonds

• The yield on 10-year Treasuries was little changed at 4.29%
• Germany’s 10-year yield advanced two basis points to 2.41%
• Britain’s 10-year yield advanced four basis points to 4.49%

Commodities

• Brent crude rose 2.6% to $74.72 a barrel
• Spot gold rose 0.2% to $2,749.80 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu.

©2024 Bloomberg L.P.