Stocks Fall as Caution Abounds Before Key Events: Markets Wrap

image is BloomburgMedia_SM4XEADWX2PS00_30-10-2024_08-37-58_638658432000000000.jpg

Pedestrians cross a road in front of the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Thursday, Oct. 29, 2020. Japanese stocks pared losses after the Bank of Japan’s policy decision and as U.S. futures bounced back following a global equity rout. Photographer: Kiyoshi Ota/Bloomberg

European stocks followed Asian peers lower amid a deluge of earnings, on a day fraught with risks including the UK budget and key economic reports.

The Stoxx Europe 600 index fell for a second day, with all eyes on the UK budget and the euro-area economic growth data due later Wednesday.

GSK Plc declined after reporting lower-than-expected sales for two of its blockbuster vaccines. Nexans SA plunged 10% after missing revenue estimates, while Amundi SA dropped more than 5% after net inflows fell short of estimates. Puig Brands SA surged after reporting a jump in revenue. UBS Group AG climbed after an earnings beat, while Standard Chartered Plc rose after boosting returns to shareholders.

US equity futures edged higher after the Nasdaq Composite closed at a record. Alphabet Inc. rallied more than 5% in late trading as the Google parent’s earnings beat estimates, while Advanced Micro Devices Inc. sank 7% amid a lackluster revenue forecast. A Bloomberg gauge of the dollar snapped a three-day advance before US releases gross domestic product data. Treasury yields ticked lower.

“The mood in the market today feels more like the calm before the next storm,” said Hebe Chen, a market analyst at IG Markets Ltd. “Traders are on edge, bracing for the incoming tide of uncertainties from multiple sources,” including the US election and major tech earnings.

  

MSCI’s Asian equity benchmark slipped, dragged lower by more than 1% losses in mainland China and Hong Kong stocks.

Just about a week away from the Fed decision, investors are turning their focus to three high-profile reports in the US that look set to show underlying resilience in the economy and a temporary hiccup in job growth. Forecasts are calling for a solid 3% annualized pace for gross domestic product that would match growth seen in the previous three months.   

Treasuries are on track for their worst month in more than two years amid signs of economic strength, posturing for the election and heavy supply of new notes and bonds.

Traders will also be watching results from Microsoft Corp. and Meta Platforms Inc. later Wednesday for the outlook of artificial intelligence.   

Oil steadied after a two-day decline on the prospect for a further easing of hostilities in the Middle East. Gold hit a fresh record early on Wednesday as traders weighed potential market disruption ahead of the election. Bitcoin, seen as a Trump trade, hovered near an all-time high.  

Back in Asia, Reuters reported that Chinese authorities were weighing approval of 10 trillion yuan ($1.4 trillion) in additional borrowing in the coming years to bolster the economy and address local government debt risks.  

“China’s latest stimulus package appears underwhelming,” said Charu Chanana, chief investment strategist for Saxo Markets. “Foreign investors are still highly concerned about potential tariff threats if next week’s US elections result in a Republican sweep.”  

WATCH GQG Partners has trimmed its exposure to the Magnificent Seven group of stocks, in particular Nvidia, says portfolio manager Brian Kersmanc.Source: Bloomberg

Key events this week:

  • Eurozone consumer confidence, GDP, Wednesday
  • US GDP, ADP employment, pending home sales, Wednesday
  • Meta Platforms, Microsoft earnings, Wednesday
  • US Treasury Department holds quarterly refunding announcement of bond-auction plans, Wednesday
  • China Manufacturing and non-manufacturing PMI, Thursday
  • Bank of Japan rate decision, Thursday
  • Eurozone CPI, unemployment, Thursday
  • US personal income, spending and PCE inflation data, initial jobless claims, Thursday
  • Amazon, Apple earnings, Thursday
  • China Caixin manufacturing PMI, Friday
  • US employment, ISM manufacturing, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 fell 0.6% as of 8:19 a.m. London time
  • S&P 500 futures rose 0.2%
  • Nasdaq 100 futures rose 0.2%
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index fell 0.1%
  • The MSCI Emerging Markets Index fell 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro rose 0.2% to $1.0842
  • The Japanese yen rose 0.2% to 153.11 per dollar
  • The offshore yuan rose 0.1% to 7.1325 per dollar
  • The British pound was little changed at $1.3022

Cryptocurrencies

  • Bitcoin rose 0.2% to $72,473.48
  • Ether rose 2.1% to $2,674.17

Bonds

  • The yield on 10-year Treasuries declined one basis point to 4.24%
  • Germany’s 10-year yield declined three basis points to 2.31%
  • Britain’s 10-year yield declined five basis points to 4.26%

Commodities

  • Brent crude rose 0.9% to $71.76 a barrel
  • Spot gold rose 0.3% to $2,782.73 an ounce

This story was produced with the assistance of Bloomberg Automation.

©2024 Bloomberg L.P.

By Winnie Hsu , Robert Br

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