Stocks Mixed, Bonds Climb As Slowdown Fears Grow: Markets Wrap

Stocks drifted in Europe and dropped across Asia as investors weighed the latest raft of disappointing data from the world’s biggest economy. U.S. index futures edged higher and government bonds advanced.

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The Stoxx Europe 600 was little changed on the heels of its worst daily decline of the year Wednesday, while contracts on the S&P 500 ticked higher following its first back-to-back drops of more than 1% this year. That came as a report showed U.S. private-sector payrolls fell short of estimates, and hours before a key reading on U.S. service-sector sentiment.

Shares slumped in Japan and Australia, while Hong Kong stocks pared an advance after reports emerged that the city will invoke emergency powers to ban face masks at public gatherings. Ten-year Treasury yields dipped to their their lowest level in more than three weeks. Crude oil drifted with the dollar.

This week’s string of weak growth data adds to the challenges facing a global economy already grappling with political risk and trade tensions. The U.S. is set to levy new tariffs on imports from the European Union starting Oct. 18. Focus now turns to services PMI data on Thursday and the non farm payrolls figure on Friday, numbers that will be closely watched by investors gauging the likelihood that the Federal Reserve cuts rates this mon

“The employment number is going to be a very important metric for the Fed,” Subadra Rajappa, head of U.S. rates strategy at Societe Generale SA, told Bloomberg TV. Rajappa said it’s the most important data point heading into the Fed’s October meeting. “If you get a weak number you’re going to get more of a bull steepening the market starting to price in more rate cuts.”

Here are some key events coming up this week:

  • Euro-area producer prices for August are scheduled for Thursday.
  • Non-manufacturing U.S. PMI comes Thursday.
  • The monthly “nonfarm” jobs report is due on Friday.
  • Federal Reserve Chairman Jerome Powell is set to speak Friday.
  • The Reserve Bank of India sets policy on Friday.

Here are the main moves in markets

Stocks

  • The Stoxx Europe 600 Index dipped 0.1% as of 8:17 a.m. London time.
  • Futures on the S&P 500 Index climbed 0.4%.
  • The U.K.’s FTSE 100 Index fell 0.3%.
  • France’s CAC 40 Index gained 0.3%.
  • The MSCI Asia Pacific Index sank 0.9%.

Currencies

  • The Bloomberg Dollar Spot Index gained 0.1%.
  • The pound was steady at 89.105 pence per euro.
  • The euro decreased 0.1% to $ 1.0946.
  • The Japanese yen fell 0.1% to 107.26 per dollar.
  • The onshore yuan declined 0.4% to 7.148 per dollar.

Bonds

  • The yield on 10-year Treasuries declined one basis point to 1.59%.
  • The yield on two-year Treasuries dipped less than one basis point to 1.48%.
  • Britain’s 10-year yield fell three basis points to 0.469%.
  • Japan’s 10-year yield decreased three basis points to -0.195%.

Commodities

  • West Texas Intermediate crude declined 0.1% to $ 52.61 a barrel.
  • Gold fell 0.1% to $ 1,497.42 an ounce.
  • LME aluminum climbed 0.2% to $ 1,708 per metric ton.
  • Soybeans were unchanged at $ 9.14 a bushel.

News – Investor’s Business Daily

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