Stocks, bonds weigh dips as the Fed and electoral risks: wrap markets

(Bloomberg) — Treasuries were flat after Monday's sell-off, while stock futures fell as traders speculated on the path of U.S. interest rates.

Most Read from Bloomberg

US futures retreated 0.2%, with the S&P 500 set for its first back-to-back drop in six weeks. Europe's Stoxx 600 posted a small move. The yield on the 10-year Treasury added one basis point to 4.21% after rising 11 basis-points yesterday. The dollar was little changed.

Bonds fell on Monday as investors scaled back their expectations for a Fed rate cut after central bank officials signaled a preference for slower rate cuts. Additionally, traders are weighing the inflationary impact of a potential Donald Trump presidential victory, as his promised tax cuts and trade tariffs could eventually include faster price increases and higher rates.

“It's very clearly tied to the business of winning the Republicans — and therefore an agenda that will be much more inflationary than the Democrats. We're in a market that's betting on Trump,” said Christopher Dembic, senior investment adviser at Pictet Asset Management. “Rising yields threaten equity markets.” started paying.”

Bonds are selling across the board as traders reconsider the Fed's path

Gold prices hit record highs on Monday, with traders paying attention to geopolitical risks including the Middle East conflict and the US election seeking haven. Oil fell after rising nearly 2% on Monday.

Pictet's Dembic noted that the pressure on stocks from the bond market comes with Europe in a low-income season. According to data compiled by Bloomberg Intelligence, so far around 47% of companies in MSCI Europe have reported lower-than-expected results while only 27% have delivered outside.

Corporate Highlights:

• Germany's SAP rose as much as 5.6% in the third quarter after delivering a beat on several key metrics and raising some elements of its guidance for the full year.

• Shares of Hyundai Motor India Ltd fell in their Mumbai debut on Tuesday after the company raised $3.3 billion in the country's largest-ever initial public offering. Tokyo Metro Co. And IPOs for Horizon Robotics Inc. have met strong demand

This week's highlights:

• Christine Lagarde of the ECB was interviewed on Bloomberg Television on Tuesday

• The BOE's Andrew Bailey, along with the ECB's Klaas Knot and Robert Holzmann, will speak at the Bloomberg Global Regulatory Forum in New York on Tuesday.

• Philadelphia Fed President Patrick Harker speaks on Tuesday

• Canada rate decision, Wednesday

• Eurozone consumer confidence, Wednesday

• US existing home sales, Wednesday

• Boeing, Tesla, Deutsche Bank earnings, Wednesday

• Fed's Beige Book, Wednesday

• US New Home Sales, Jobless Claims, S&P Global Manufacturing & Services PMI, Thursday

• UPS, Barclays earnings, Thursday

• The Fed's Beth Hammack spoke on Thursday

• US Durable Goods, University of Michigan Consumer Sentiment, Friday

Some of the main rice in the market:

stock

• The STOXX Europe 600 was down 0.1% at 8:50 a.m. London time

• S&P 500 futures fell 0.2%

• Nasdaq 100 futures fell 0.3%

• Dow Jones Industrial Average futures fell 0.2%

• The MSCI Asia Pacific index fell 1%

• The MSCI emerging market index fell 0.4%

currency

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro rose 0.2% to $1.0834

• The Japanese yen was little changed at 150.97 per dollar

• The offshore yuan was little changed at 7.1334 per dollar

• The British pound rose 0.2% to $1.3007

Cryptocurrency

• Bitcoin fell 0.3% to $67,493.66

• Ether fell 0.9% to $2,651.08

bond

• The yield on 10-year Treasuries advanced one basis point to 4.21%

• Germany's 10-year yield rose four basis points to 2.32%

• Britain's 10-year yield rose four basis points to 4.17%

merchandise

• Brent crude fell 0.8% to $73.73 a barrel

• Spot gold rose 0.5% to $2,734.17 an ounce

This story was produced with the help of Bloomberg Automation.

–Assisted by Jason Scott, Winnie Hu, Abhishek Bishnoi and Aya Wagatsuma.

Most Read from Bloomberg Business Week

©2024 Bloomberg LP