Global equities posted modest moves at the start of a busy week of economic data and central bank meetings that will test optimism among investors that interest rates will soon head lower.
US futures contracts fell less than 0.2%. Macy’s jumped 22% in premarket after it was said to receive a $5.8 billion buyout offer from Arkhouse Management and Brigade Capital Management. Snap and Pinterest rose after analyst upgrades. Europe’s Stoxx 600 index edged lower.
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In currencies, the yen extended its losses to 1% after Bloomberg News reported that Bank of Japan officials see little need to rush into scrapping the world’s last negative interest rate, citing insufficient evidence of wage growth feeding inflation. The dollar ticked higher, while Treasury 10-year yields rose three basis points to 4.25%.
Traders are looking ahead to US inflation figures on Tuesday, a Federal Reserve policy decision Wednesday and retail sales numbers Thursday. Policy decisions at the European Central Bank and Bank of England add to a crowded calendar.
“This should also be the last busy week for the year after which we enter into the holiday illiquidity period,” said Mohit Kumar, chief European economist at Jefferies International. “Even though central banks are likely to push back on rate cuts, we do not see a sharp rise in rates which would derail the upward momentum.”
Stronger-than-expected US economic figures boosting optimism that the Fed can rein in inflation without triggering a recession have fueled a six-week rally in the S&P 500. The index has climbed to the highest level since March 2022 and several Wall Street strategists are tipping further gains next year.
Oppenheimer & Co. Chief Investment Strategist John Stoltzfus on Monday joined Fundstrat Global Advisors LLC’s Tom Lee in making the most bullish forecast, predicting a record high of 5,200 points for the US benchmark by the end of 2024. That’s about 13% higher than current levels. A Citigroup Inc. team led by Scott Chronert sees the gauge climbing to around 5,100.
Mark Haefele, chief investment officer at UBS Global Wealth Management, is among those who are more cautious. “US economic data will need to walk a fine line in the coming months to sustain the recent rally,” he said. “While we expect stocks to sustain recent gains and advance modestly higher in 2024, equity markets are already pricing in plenty of good news.” He sees the S&P 500 ending 2024 at 4,700.
Elsewhere on Monday, oil slipped further after concerns that supplies are overtaking demand triggered the longest weekly losing streak in five years.
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Bitcoin delivered another bout of its notorious volatility in a brief but sharp tumble toward $40,000 amid a broader crypto selloff. The largest token sank as much as 7.5% to $40,521 before paring some of the losses. Cryptocurrency-linked stocks fell.
Key events this week:
- Argentina new President Javier Milei expected to call congress into extraordinary session, Monday
- UK’s CBI publishes latest economic forecast, Monday
- RBA Governor Michele Bullock speaks, Tuesday
- Japan producer prices, Tuesday
- India inflation, Tuesday
- Brazil inflation, Tuesday
- UK unemployment, Tuesday
- US inflation, Tuesday
- Eurozone industrial production, Wednesday
- Brazil rate decision, Wednesday
- Federal Reserve rate decision, Wednesday
- Australian unemployment, Thursday
- ECB rate decision, Thursday
- BOE rate decision, Thursday
- Norway rate decision, Thursday
- US retail sales, Thursday
- China 1-year MLF, Friday
- China retail sales, industrial production and jobless rate, Friday
- Eurozone PMIs, Friday
- UK manufacturing PMI, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 6:01 a.m. New York time
- Nasdaq 100 futures fell 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro rose 0.1% to $1.0775
- The British pound rose 0.2% to $1.2574
- The Japanese yen fell 0.9% to 146.20 per dollar
Cryptocurrencies
- Bitcoin fell 3.2% to $42,402.73
- Ether fell 4.8% to $2,246.66
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.25%
- Germany’s 10-year yield declined two basis points to 2.25%
- Britain’s 10-year yield was little changed at 4.04%
Commodities
- West Texas Intermediate crude fell 1.1% to $70.45 a barrel
- Spot gold fell 0.6% to $1 993.51 an ounce
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