(Bloomberg) — Stocks and US equity futures slipped Monday, sapped by a dimmer economic outlook that’s also cooling expectations for peak interest rates and bolstering sovereign bonds.
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An Asian equity index fell amid declines in Japan as well as in China technology shares. S&P 500, Nasdaq 100 and European contracts were in the red.
Australian debt jumped in the slipstream of a Treasuries rally Friday. The US 10-year yield was at about 2.77%, paring a sliver of last week’s drop.
Investors have shifted to betting that ebbing economic expansion, and possibly even a recession, will moderate high inflation and soften the current cycle of monetary tightening that’s roiled global markets in 2022.
A dollar gauge edged up, oil slid to around $94 a barrel and Bitcoin weakened toward $22,000, reflecting a cautious mood.
The Federal Reserve policy decision this week, along with earnings from the likes of Google’s Alphabet Inc. and technology titan Apple Inc., will help to clarify the outlook for a one-month-old rebound in stocks from this year’s bruising slide.
“We still see further downside for risky assets as recession fears accumulate and central banks remain committed to fighting inflation at the expense of growth,” Eric Robertsen, chief strategist at Standard Chartered Bank Plc, wrote in a note.
Retreating gauges of business activity and mixed earnings performance from major firms left US shares in the red on Friday.
Treasury Secretary Janet Yellen said she doesn’t see any sign that the US economy is in a broad recession. Former Treasury Secretary Lawrence Summers said a soft landing is highly unlikely.
In China, traders are awaiting developments on a potential restructuring plan for China Evergrande Group. The world’s most indebted developer — whose liquidity woes sparked a broader debt crisis in China’s property industry — has previously said it was on track to deliver a preliminary plan by the end of July.
Wheat climbed as commodity markets digested a Russian missile strike on Odesa’s sea port that threatened to test a fledgling agreement to unblock Ukrainian grain exports from the Black Sea.
Some of the main moves in markets:
S&P 500 futures fell 0.3% as of 10:56 a.m. in Tokyo. The S&P 500 fell 0.9%
Nasdaq 100 futures slipped 0.2%. The Nasdaq 100 fell 1.8%
Japan’s Topix index fell 0.7%
South Korea’s Kospi index added 0.2%
Hong Kong’s Hang Seng index dropped 0.6%
China’s Shanghai Composite index shed 0.2%
Australia’s S&P/ASX 200 Index fell 0.2%
Euro Stoxx 50 futures slid 0.9%
The Bloomberg Dollar Spot Index rose 0.1%
The euro was at $1.0199, down 0.1%
The Japanese yen was at 136.14 per dollar
The offshore yuan was at 6.7599 per dollar
West Texas Intermediate crude was at $94.04 a barrel, down 0.6%
Gold was at $1,724.40 an ounce, down 0.2%
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