Stocks Slip With Focus on Trump’s Picks, US Data: Markets Wrap

(Bloomberg) — US equity futures edged lower as traders digested Donald Trump’s latest cabinet appointments and looked ahead to a burst of data on the American economy for clues on the outlook for interest rates. 

Contracts on the Nasdaq 100 dropped 0.3% while those on the S&P 500 slipped 0.1%. Treasuries advanced, pushing the 10-year benchmark yield down by five basis points to 4.26% with a slew of pre-Thanksgiving holiday US data expected, including the Federal Reserve’s preferred inflation gauge and an update on economic growth.

The president elect’s tariffs agenda appeared to gather further momentum, as Trump named Jamieson Greer as the US Trade Representative and Kevin Hassett to direct the National Economic Council. Greer was intimately involved in Trump’s first-term trade policy decisions. 

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“If we get close to a place where we are talking about across-the-board tariffs, I think that would be a wake-up call for risk assets, equities and credit alike,” Wei Li, global chief investment strategist at BlackRock Inc., said in an interview with Bloomberg TV. “We’re risk-on for now, but things could change.”

Investors have plowed money into US stocks this year, with inflows on course for a record and have been rewarded with a gain of 26% in the S&P 500, vindicating bets on American exceptionalism. European stocks are trading at a record 40% discount to the S&P 500 with the region’s benchmark gauge up just 5% this year.

That divergence is making global stock market performance ever more polarized and that’s unlikely to change anytime soon, JPMorgan Chase & Co. strategists led by Mislav Matejka wrote.

In currency markets, Bloomberg’s dollar index fell to the lowest this week, snapping a rally that’s propelled eight straight weeks of gains through Friday. The dollar is seen as one of the biggest beneficiaries of Trump’s pro-growth agenda.

The euro rose after European Central Bank Executive Board member Isabel Schnabel warned against cutting interest rates too far. The currency has been singled out as one of the most vulnerable to Trump’s tariff agenda by strategists at Goldman Sachs Group Inc., JPMorgan, and Citigroup Inc.

In France, a measure of risk on the country’s bonds rose to levels last seen during the euro-area debt crisis as a political standoff over the budget threatens to bring down the government. The market nerves reflect investor concerns over Prime Minister Michel Barnier’s ability to pass a budget for next year.

Middle East tensions abated somewhat as President Joe Biden said Israel reached a cease-fire deal with the Lebanese militant group Hezbollah after weeks of talks mediated by the US. 

Among individual premarket movers, Dell Technologies Inc. shares slumped along with those of peer HP Inc. as quarterly financial results indicated that a long-awaited recovery of the personal computer market is stalling.

Key events this week:

• US PCE, initial jobless claims, GDP, Wednesday
• Eurozone consumer confidence, Thursday
• US Thanksgiving holiday. Markets closed, Thursday
• Eurozone CPI, Friday
• ECB releases consumer expectations survey for October, Friday
• “Black Friday,” the traditional start of the US holiday shopping rush

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.1% as of 7:32 a.m. New York time
• Nasdaq 100 futures fell 0.3%
• Futures on the Dow Jones Industrial Average were little changed
• The Stoxx Europe 600 fell 0.4%
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.4% to $1.0527
• The British pound rose 0.4% to $1.2616
• The Japanese yen rose 1.1% to 151.36 per dollar

Cryptocurrencies

• Bitcoin rose 1.4% to $92,966
• Ether rose 3.8% to $3,449.42

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.26%
• Germany’s 10-year yield declined three basis points to 2.16%
• Britain’s 10-year yield declined five basis points to 4.30%

Commodities

• West Texas Intermediate crude rose 0.6% to $69.15 a barrel
• Spot gold rose 0.7% to $2,652.23 an ounce

This story was produced with the assistance of Bloomberg Automation.

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