Stocks Pause Days of Losses Ahead of US Jobs Data: Markets Wrap

(Bloomberg) — Global equities steadied after days of declines as uncertainty over the health of the US economy and the pace of possible Federal Reserve interest rate cuts persist.

Europe’s Stoxx 600 index was little changed, with tech heavyweight ASML Holding NV and luxury stocks among the biggest losers. Mining equities declined for a fourth session after iron ore fell to the lowest since 2022. 

US futures contracts edged higher, while Asian equities erased most gains after declines in Japan.

Traders are looking toward weekly jobless claims data due later today and Friday’s nonfarm payrolls reports to assess whether the US economy is heading for a soft-landing as the Fed prepares to start easing policy. Global stocks suffered their worst losses earlier this week since the Aug. 5 meltdown, with the Cboe Volatility Index remaining elevated at 20.

Swap traders have ramped up bets on the pace of rate cuts after a Wednesday reading on US job openings trailed estimates and the Fed’s Beige Book survey showed flat or declining economic activity. Rates pricing foresees at least 100 basis points of easing this year, including one jumbo cut of 50 basis points.

“We think that the US soft landing scenario is intact but acknowledge that the next two-three months could be a tricky period,” Eddy Loh, chief investment officer at Maybank Group Wealth Management, said on Bloomberg Television. “If the Fed were to cut 50 basis points, the market could perceive it as a negative because that means the Fed is seeing something in the economy.”

The yield on two-year Treasuries advanced one basis point after tumbling Wednesday on the data showing a slowdown in the US labor market. The dollar held steady.

Iron ore slumped to trade near $90 a ton as China’s main steel industry group advised mills to be cautious in boosting output too quickly to avoid snuffing out a post-summer recovery. Brent futures were heading for the first day of gains in five, with OPEC+ getting closer to an agreement on delaying an increase in oil production.

Corporate Highlights:

• Tiffany & Co., LVMH’s leading jewelry maker, is planning to downsize a flagship store of more than 12,000 square feet in Shanghai.
• Nvidia Corp., responding to a Bloomberg News report about the US Department of Justice sending out subpoenas as part of an antitrust probe, said it has been in contact with the government agency but hasn’t been subpoenaed.
• Volvo Car AB scaled back its outlook as rising tariffs hurt some of its models made in China, a day after abandoning a target to only sell electric cars by 2030.

Key events this week:

• Eurozone retail sales, Thursday
• US initial jobless claims, ADP employment, ISM services index, Thursday
• Eurozone GDP, Friday
• US nonfarm payrolls, Friday
• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 10:09 a.m. London time
• S&P 500 futures rose 0.1%
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average rose 0.1%
• The MSCI Asia Pacific Index rose 0.1%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.1098
• The Japanese yen was little changed at 143.63 per dollar
• The offshore yuan rose 0.2% to 7.0991 per dollar
• The British pound rose 0.2% to $1.3169

Cryptocurrencies

• Bitcoin fell 1.9% to $56,946.09
• Ether fell 2.2% to $2,401.97

Bonds

• The yield on 10-year Treasuries advanced two basis points to 3.77%
• Germany’s 10-year yield was little changed at 2.23%
• Britain’s 10-year yield was little changed at 3.93%

Commodities

• Brent crude rose 0.7% to $73.23 a barrel
• Spot gold rose 0.8% to $2,515.72 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Chiranjivi Chakraborty.

©2024 Bloomberg L.P.