Contracts on the S&P 500 remained steady after the benchmark marked its 41st record close of the year on Tuesday. Nasdaq 100 futures dipped 0.2% as U.S.-listed Chinese tech stocks declined in premarket trading, while Treasuries experienced minor fluctuations.
Traders are on the lookout for new catalysts following last week’s half-point rate cut by the Federal Reserve, amid ongoing concerns about economic growth. Recent policy changes from China on Wednesday did not extend their influence beyond Asian markets, prompting investors to focus on an upcoming speech by Fed Chair Jerome Powell and key price data later in the week.
“We’ve encountered this situation with China before,” remarked Guy Miller, chief market strategist at Zurich Insurance Co. “Robust fiscal and monetary policy is essential to alter the current trajectory, which has yet to change.”
Chinese stocks rallied for a sixth consecutive day following the central bank’s record reduction of interest rates on one-year policy loans, alongside a broad stimulus package unveiled the previous day. Iron ore prices rose, and gold reached another record earlier in the session.
Corporate Highlights:
General Motors Co. saw its shares drop 3.6% in premarket trading after Morgan Stanley downgraded the automaker to underweight from equal-weight.
HP Enterprise Co. shares increased by up to 2.5% after Barclays upgraded the IT firm to overweight from equal-weight, citing signs of recovery in enterprise servers.
German software developer SAP SE’s stock fell 4% amid reports that U.S. officials are investigating potential collusion to overcharge government agencies over the past decade.
Rightmove Plc rejected a third takeover proposal from REA Group Ltd., stating the bid, valuing the UK property portal at £6.1 billion ($8.2 billion), remains unattractive.
ECB Outlook:
In Europe, the Stoxx 600 index paused its two-day rally. The deteriorating economic outlook has fueled speculation that the European Central Bank may reduce rates again next month, with HSBC economists predicting cuts at every meeting from October to April.
“The economic data has been quite shaky,” said Anwiti Bahuguna, global asset allocation CIO at Northern Trust Asset Management, noting that the region’s stocks have been downgraded from overweight to market weight. “Earlier this year, we anticipated a significant uptick, but growth has slowed more than expected,” she added during a Bloomberg TV interview.
Key Events This Week:
ECB President Christine Lagarde speaks on Thursday
U.S. jobless claims, durable goods, and revised GDP data are due Thursday
Fed Chair Jerome Powell will give pre-recorded remarks at the 10th annual U.S. Treasury Market Conference on Thursday
China’s industrial profits will be released on Friday
Eurozone consumer confidence figures will also be available on Friday
U.S. PCE and University of Michigan consumer sentiment data will be released on Friday
Market Movements:
Stocks:
S&P 500 futures were little changed as of 8:15 a.m. New York time
Nasdaq 100 futures fell 0.2%
Futures on the Dow Jones Industrial Average were stable
The Stoxx Europe 600 remained unchanged
The MSCI World Index showed little movement
Currencies:
The Bloomberg Dollar Spot Index rose 0.1%
The euro increased by 0.1% to $1.1196
The British pound fell 0.2% to $1.3383
The Japanese yen dropped 0.7% to 144.27 per dollar
Cryptocurrencies:
Bitcoin decreased by 0.7% to $63,770.35
Ether fell 1% to $2,624.68
Bonds:
The yield on 10-year Treasuries rose four basis points to 3.77%
Germany’s 10-year yield increased three basis points to 2.18%
Britain’s 10-year yield advanced two basis points to 3.96%
Commodities:
West Texas Intermediate crude fell 1.8% to $70.28 a barrel
Spot gold prices remained relatively unchanged