Stocks and bonds pause after volatile week; Oil falls: Markets wrap

(Bloomberg) — Stocks and bonds posted small moves Monday as investors reset their bets in the wake of last week’s selloff, which saw the S&P 500 index’s biggest loss since October.

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The Stoxx 600 was little changed with US futures, while Asian markets were lower. Boeing shares are under the microscope as the pace of grounding of the 737 Max 9 aircraft increases globally. Brent crude fell below $78 after Saudi Arabia reduced official selling prices for all regions amid continued weakness in the market.

Markets are looking for direction after global stocks and US Treasuries fell the most since October last week amid speculation that the Federal Reserve is in no rush to cut interest rates. The US inflation reading due on Thursday as well as the start of earnings season at the end of the week may provide investors with further catalysts.

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Sentiment remains very negative in China, Nomura Group analysts, including Chetan Seth in Singapore, wrote in a note to clients. “There have been more signs of support for the economy, but equity investors remain unconvinced,” they said.

In Europe, data on Monday showed that German factory orders rose much less than expected in November, a disappointing indicator for Europe’s largest economy. Eurozone retail sales and consumer confidence figures due later in the day may give a better guide to the region’s economic recovery.

The yield on US Treasury bonds rose by one basis point to 4.06%. Some traders are unfazed by the recent pullback, seeing it as an opportunity to take advantage of higher yields before the Fed starts cutting interest rates.

The dynamic was evident on Friday, when bond prices fell after the Labor Department reported that job growth unexpectedly accelerated last month. But the selling was tempered by a swoop of buyers as 10-year Treasury yields approached 4.1%, the highest level since mid-December.

The story continues

In commodities, Brent crude fell by more than 1%, halting a rise last week after Saudi price cuts. These cuts highlight the deteriorating global outlook amid strong global supplies, including from the United States, and overcome concerns about tensions in the Red Sea and supply disruptions in Libya.

Main events this week:

• Eurozone economic confidence, retail sales, consumer confidence, Monday

• Atlanta Fed President Rafael Bostic speaks Monday

• The US House of Representatives returns from recess on Monday

• Retail sales in Australia, Tuesday

• Japan, Tokyo CPI, Household Spending, Tuesday

• Unemployment in the eurozone, Tuesday

• The World Economic Forum’s Global Risks Report was released on Wednesday

• US wholesale inventories on Wednesday

• The SEC’s deadline to vote on Bitcoin ETF applications is Wednesday

• New York Fed President John Williams speaks on Wednesday

• US Consumer Price Index, Initial Jobless Claims, Thursday

• China CPI, Producer Price Index, Trade, Friday

• French CPI, Friday

• UK industrial production, Friday

• US Producer Price Index, Friday

• Bank of America, Bank of New York Mellon, BlackRock, Citigroup, JPMorgan Chase and Wells Fargo reported fourth-quarter results on Friday.

• Minneapolis Fed President Neel Kashkari speaks on Friday

Stores

• The Stoxx Europe 600 was little changed as of 8:23 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Dow Jones Industrial Average futures fell 0.4%

• MSCI Asia Pacific Stock Index fell 0.7%

• MSCI Emerging Markets Index fell 0.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.1 percent to $1.0932

• There was little change in the Japanese yen at 144.60 to the dollar

• The yuan in external transactions fell 0.1 percent to 7.1719 per dollar

• The British pound fell 0.1 percent to $1.2701

Digital currencies

• Bitcoin fell 0.4% to $44,065.22

• Ethereum fell 0.4% to $2,232.6

Bonds

• The yield on the 10-year Treasury note rose one basis point to 4.06%.

• The yield on German 10-year bonds rose by three basis points to 2.19%.

• The UK 10-year bond yield rose five basis points to 3.83%.

Goods

• Brent crude fell 1 percent to $78 a barrel

• Gold in spot transactions fell 0.8 percent to $2,029.62 per ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Matthew Burgess.

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