US Stocks Slip as Risk-On Mood Put on Pause: Markets Wrap

(Bloomberg) — US stocks and bonds slumped as traders awaited key data on the American labor market due Friday to gauge its impact on the scope of further Federal Reserve interest-rate cuts.

S&P 500 edged down 0.09% with Ford Motor Co. and General Motors dragging on the benchmark index after profit warnings from European automakers. Treasury yields climbed, led by the policy-sensitive two-year note while the dollar was little changed. 

As investors gauge the outlook for Fed rate cuts, investors must also ponder a cocktail of risks, including rising tensions in the Middle East. The record-setting rally in stocks will also be tested by third-quarter corporate results set to kick off in mid-October.

A strong print showing labor market resilience Friday may help fuel risk-on bets, according to Goldman Sachs Group Inc. strategists led by David Kostin, emboldening investors to move “out of expensive ‘quality’ stocks into less-loved lower quality firms.”

Investors will also be tuning in for remarks by Fed Chair Jerome Powell on Monday when he takes the stage at a National Association for Business Economics conference. 

Europe’s Stoxx 600 index slid around 1%, paced by declines in automakers as Jeep maker Stellantis NV cut its profit margin forecast. Volkswagen AG on Friday issued its second profit warning in three months. 

That was in contrast to the mood in China, where the CSI 300 Index jumped as much as 9.1%, the most since 2008, fueled by the stimulus package. The policy steps also buoyed European mining and luxury stocks. 

Corporate Highlights

• Verizon Communications Inc., the biggest wireless carrier in the US, has agreed to sell thousands of mobile phone towers to digital infrastructure firm Vertical Bridge.
• DirecTV and Dish have agreed to combine in a deal that will create the biggest pay-TV provider in the US.
• Walt Disney Co. shares rise 1.2% in US premarket trading as Seaport upgrades to buy from neutral, saying it was positive about the media giant’s streaming business.
• REA Group Ltd. walked away from its pursuit of Rightmove Plc after being repeatedly rejected by the UK property portal.

Key events this week: 

• Fed Chair Jerome Powell delivers speech at National Association for Business Economics conference in Nashville on Monday
• European Central Bank President Christine Lagarde speaks at EU Parliament monetary dialogue on Monday
• Bank of England policy maker Megan Greene joins panel at NABE to discuss global monetary policy on Monday
• Atlanta Fed President Raphael Bostic, Fed Governor Lisa Cook, Richmond Fed President Thomas Barkin and Boston Fed President Susan Collins attend conference on Tuesday
• ECB policy makers speaking at various locations include Olli Rehn, Luis de Guindos, Isabel Schnabel and Joachim Nagel on Tuesday
• BOE chief economist Huw Pill speaks at Confederation of British Industry economic growth board on Tuesday
• Bank of Japan issues summary of opinions for September on Tuesday
• South Korea CPI, S&P Global Manufacturing PMI on Wednesday
• Fed speakers include Richmond’s Thomas Barkin, Cleveland’s Beth Hammack, St. Louis’s Alberto Musalem and Fed Governor Michelle Bowman on Wednesday
• US nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.2% as of 9:30 a.m. New York time
• The Nasdaq 100 fell 0.2%
• The Dow Jones Industrial Average fell 0.2%
• The Stoxx Europe 600 fell 0.8%
• The MSCI World Index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.1174
• The British pound rose 0.1% to $1.3388
• The Japanese yen fell 0.4% to 142.82 per dollar

Cryptocurrencies

• Bitcoin fell 2.8% to $63,970.95
• Ether fell 1.2% to $2,629.19

Bonds

• The yield on 10-year Treasuries was little changed at 3.75%
• Germany’s 10-year yield declined two basis points to 2.11%
• Britain’s 10-year yield advanced one basis point to 3.99%

Commodities

• West Texas Intermediate crude rose 0.1% to $68.28 a barrel
• Spot gold fell 0.7% to $2,640.54 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Catherine Bosley, Sagarika Jaisinghani and Kit Rees.

©2024 Bloomberg L.P.