US Futures Gain as Dollar Snaps 8-Week Winning Run: Markets Wrap

(Bloomberg) — US equity futures gained with Treasuries Friday, while speculation that president-elect Donald Trump will temper his most extreme trade policies drove the dollar to its biggest weekly loss in three months.

Contracts on the S&P 500 rose 0.3%, pointing to modest gains in Friday’s shortened, post-holiday trading session on Wall Street. The S&P 500 has already risen 5% in November, on course for its best month since February as investors plowed $141 billion into US equities, the heaviest inflows for a four-week period on record, according to EPFR Global data. A handful of tech titans have led 26% year-to-date gains in US stocks on the prospect of Federal Reserve rate cuts while the American economy continues to chalk up growth.

Trump’s pick for his Treasury secretary has fueled optimism that tariffs will be measured, boosting US stocks and bonds, and sapping dollar strength. The Bloomberg Dollar Spot Index extended a weekly decline to more than 1%, snapping eight weeks of gains.

“We were talking day in and day out about trade tensions in 2019. What happened? The Nasdaq was on a tear. What mattered was the Fed was making a U-turn, real rates went down, and that drove equities,” Max Kettner, multi-asset chief strategist at HSBC Holdings Plc, said in an interview with Bloomberg TV. “That’s very similar to now — this is still a cutting cycle. It’s a fantastic set-up.”

Treasury yields fell as cash trading resumed after the Thanksgiving holiday. European stocks were little changed, although miners including Anglo American Plc outperformed, boosted by optimism that China will adopt further measures to stimulate its economy. 

Meanwhile, the yen rose to the highest level in more than a month against the greenback, strengthening past 150 for a time. The dollar slipped against major currencies, with an index of greenback strength headed for its first weekly decline in two months. 

Gains for Japan’s currency were helped by Tokyo inflation data that showed prices rose more than expected on a headline basis, but broadly in line with estimates once fresh food and energy were excluded. Swaps market pricing indicates a more than 60% chance the Bank of Japan will raise interest rates when it meets next month.

Japan may also delay a decision on raising taxes to help cover increased defense spending, a senior ruling coalition official said.

Key events this week:

• 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 rose 0.3% as of 5:39 a.m. New York time
• Nasdaq 100 futures rose 0.3%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The Stoxx Europe 600 was little changed
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.1% to $1.0567
• The British pound was little changed at $1.2686
• The Japanese yen rose 1% to 150.09 per dollar

Cryptocurrencies

• Bitcoin rose 1.7% to $96,718.43
• Ether was little changed at $3,574.51

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.21%
• Germany’s 10-year yield declined one basis point to 2.12%
• Britain’s 10-year yield declined five basis points to 4.23%

Commodities

• West Texas Intermediate crude fell 0.5% to $68.38 a barrel
• Spot gold rose 0.9% to $2,662.78 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jan-Patrick Barnert and Divya Patil.

©2024 Bloomberg L.P.