(Bloomberg) — Tech stocks led an advance in US equity futures and traders looked ahead to remarks from Federal Reserve Chair Jerome Powell for clues on the outlook for interest rates.
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Nasdaq 100 index contracts climbed 0.7%, buoyed by positive earnings news in the sector. S&P 500 contracts edged higher after the benchmark eked out its 55th record high of the year on Tuesday. The dollar strengthened and 10-year Treasury yields climbed.
French markets were relatively stable before Wednesday’s no-confidence vote that threatens to topple the government. South Korea’s won rebounded after President Yoon Suk Yeol rescinded his shock declaration of martial law.
Powell’s speech and US data on services and manufacturing will capture attention later in the build-up to Friday’s crucial update on the American labor market. Fed Bank of San Francisco President Mary Daly said a December rate reduction isn’t certain, but remains on the table.
“The Fed has been quite clear up until now in their signaling, so if they were going to pause Powell might give some signals because they won’t want to surprise the market,” said Guy Miller, chief strategist at Zurich Insurance. “But I do think they will cut by 25 basis points this month.”
The surge in US stocks that has driven the S&P 500 index 27% higher this year shows few signs of fading, according to strategists at Barclays Plc, powered by the election of Donald Trump and a positive economic backdrop.
“It is hard to see an end to US exceptionalism any time soon, which we think remains the playbook into 2025,” the team lead by Emmanuel Cau wrote in a research note.
In France, the CAC 40 stocks index rose, marginally outperforming Europe’s regional Stoxx 600 gauge, while the yield premium on French bonds over their German equivalents was steady. The euro weakened slightly. The stability in assets before Wednesday’s vote came as no surprise to Nannette Hechler-Fayd’herbe, EMEA chief investment officer at Lombard Odier.
“This is not a crisis of the style we had during 2012 and 2013 with the European debt crisis,” she said on Bloomberg Television. “France has a current account deficit that is tiny when you think about it, which means it has the ability to recycle and fund the government debt internally. That is its strength on which markets can take solace and build on.”
Korea Shock
Investors are assessing what’s next for South Korea after the opposition Democratic Party said it will pursue charges of treason and impeachment against Yoon for declaring martial law illegally. The Bank of Korea said it will increase short-term liquidity and take “active” steps in currency markets as needed to ensure stability.
“There’s certainly some lingering uncertainty — but the quick response from Korean authorities means that impact on the region could remain limited,” said Charu Chanana, chief investment strategist at Saxo Markets.
Oil steadied after the biggest advance in more than two weeks. Gold stabilized after rising on Tuesday as the political turmoil in South Korea and France buoyed demand for haven assets.
Corporate Highlights:
Eli Lilly & Co. said its weight-loss drug Zepbound outperformed rival Novo Nordisk A/S’s Wegovy in the first head-to-head trial of the two blockbusters.
General Motors Co. will incur more than $5 billion in charges and writedowns tied to its troubled operations in China as the automaker tries to salvage its once-profitable business in the world’s largest car market.
Dollar Tree Inc. shares soared after sales improved in the third quarter, a sign the discounter is making headway in fending off competition and drawing in more shoppers.
Royal Bank of Canada beat estimates after setting aside less money than expected for potentially bad loans.
Salesforce Inc. shares were on track for a record high in early trading after reporting quarterly revenue that topped analysts’ estimates, boosted by investor hopes that the company’s much-hyped strategy for artificial intelligence products will lift financial results.
Mastercard Inc. has agreed in principle to pay around £200 million ($254 million) to settle a UK class action lawsuit, according to a person familiar with the matter.
Key events this week:
S&P Global Eurozone Services PMI, PPI, Wednesday
US factory orders, US durable goods, Wednesday
Fed’s Jerome Powell and Alberto Musalem speak, Wednesday
Fed’s Beige Book, Wednesday
Eurozone retail sales, Thursday
US initial jobless claims, Thursday
Eurozone GDP, Friday
US jobs report, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 7:05 a.m. New York time
Nasdaq 100 futures rose 0.7%
Futures on the Dow Jones Industrial Average rose 0.5%
The Stoxx Europe 600 rose 0.3%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.0501
The British pound was little changed at $1.2678
The Japanese yen fell 0.9% to 150.93 per dollar
Cryptocurrencies
Bitcoin rose 0.2% to $96,265.25
Ether rose 3.4% to $3,738.7
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.25%
Germany’s 10-year yield advanced three basis points to 2.08%
Britain’s 10-year yield advanced three basis points to 4.27%
Commodities
This story was produced with the assistance of Bloomberg Automation.
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