Stocks Climb, Oil Sinks at Start of Pivotal Week: Markets Wrap

By Pune Media On Oct 28, 2024 17

(Bloomberg) — Crude tumbled and bonds fell, while US equity futures rose as a sense of relief percolated through markets after Israel’s retaliatory strikes against Iran avoided oil facilities.

Most Read from Bloomberg

Contracts on the S&P 500 and Nasdaq 100 signaled a rebound on Wall Street after the S&P 500 clocked its first weekly decline in seven. European stock futures also gained. The 10-year Treasury yield jumped four basis points to 4.28%, the highest in more than three months, while a gauge of the dollar was steady.

Oil slumped more than 5% at one point, while gold also edged lower.

Iran said its oil industry was operating normally following Israel’s attacks on military targets across the country. That brought some easing of geo-political tension as markets prepare for a week packed with corporate earnings and key economic data, with the US presidential election also drawing near.

“The measured and targeted response from Israel has increased hopes of de-escalation,” Warren Patterson, head of commodities strategy at ING in Singapore, wrote in a note. “If we do see some de-escalation it would allow fundamentals once again to dictate price direction.”

Among events coming up this week are results for five of the “Magnificent Seven” big-tech behemoths, which are expected to post their slowest collective quarterly earnings expansion in six quarters, according to data compiled by Bloomberg Intelligence. Also coming up are the UK budget, eurozone and US growth prints as well as a payrolls report. And then there’s the presidential election on Nov. 5.

For the US bond market, already stung by the worst selloff in six months, the coming days will be crucial, as they feature the Treasury Department’s announcement on Wednesday on the scale of its debt sales.

In currency markets, the yen was in the spotlight with a drop to its weakest level in about three months against the dollar, after a gamble by Prime Minister Shigeru Ishiba to call a snap election backfired. The weaker yen, which benefits the nation’s export-oriented economy, helped push the Topix index up by as much as 1.8%.

“Things have already got going, with the weekend bringing a couple of developments that need to be dealt with immediately, before contemplating the mountain of event risk that looms like Everest over price action,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd. “Further de-risking could well be seen short-term, with potential downside moves likely to be exacerbated were this week’s Big Tech earnings to fall short of expectations.”

Story Continues

Chinese shares edged lower after profits at industrial firms plunged in September, a challenge to the economy as deflationary pressures sap the strength of corporate finances. Meanwhile, China’s central bank unveiled a new tool to help it better manage liquidity.

In India, shares of the country’s largest solar-panel maker Waaree Energies Ltd. jumped nearly 75% early on debut after a $514 million initial public offering.

Some of the key events this week:

US job openings, Conference Board consumer confidence, goods trade, Tuesday
Alphabet, HSBC, Santander earnings, Tuesday
Australia CPI, Wednesday
Eurozone consumer confidence, GDP, Wednesday
Germany GDP, CPI, unemployment, Wednesday
UK Chancellor of the Exchequer Rachel Reeves presents budget to Parliament, Wednesday
US GDP, ADP employment, Wednesday
Meta, Microsoft, UBS, Volkswagen earnings, Wednesday
US Treasury Department holds quarterly refunding announcement of bond-auction plans, Wednesday
Australia retail sales, Thursday
China Manufacturing and non-manufacturing PMI, Thursday
Eurozone CPI, Thursday
Bank of Japan policy decision, Thursday
US PCE data, Thursday
Canada GDP, Thursday
Amazon, Apple, Samsung earnings, Thursday
China Caixin manufacturing PMI, Friday
UK S&P Global Manufacturing PMI, Friday
US nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.5% as of 7:41 a.m. London time
Nasdaq 100 futures rose 0.7%
Futures on the Dow Jones Industrial Average rose 0.5%
The MSCI Asia Pacific Index rose 0.3%
The MSCI Emerging Markets Index rose 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0799
The Japanese yen fell 0.6% to 153.19 per dollar
The offshore yuan was little changed at 7.1405 per dollar
The British pound was little changed at $1.2966

Cryptocurrencies

Bitcoin rose 1.1% to $68,457.52
Ether rose 1.2% to $2,518.24

Bonds

The yield on 10-year Treasuries advanced four basis points to 4.28%
Germany’s 10-year yield advanced four basis points to 2.33%
Britain’s 10-year yield was little changed at 4.23%

Commodities

Brent crude fell 4% to $72.97 a barrel
Spot gold fell 0.3% to $2,739.32 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Michael G. Wilson.