Stocks pare losses alongside climb in US futures: markets wrap

Stocks pared losses and US equity futures climbed, providing a little respite for global markets from concerns about an economic downturn.

An Asia-Pacific equity gauge Tuesday trimmed a drop of about 2% in half, aided by a turnaround in China. S&P 500, Nasdaq 100 and European contracts rose, pointing to steadier sentiment following a Monday rout in US shares.

A haven bid for Treasuries eased. Uncertainty over how far the Federal Reserve will hike interest rates to stem high inflation continues to shadow bonds.

Oil fell below $102 a barrel on the economic worries and the European Union’s move to soften some proposed sanctions on Russian oil over the Ukraine war.

A dollar gauge dipped but remained in sight of the highest level since 2020. In cryptocurrencies, Bitcoin added over $1 000 after sliding below $30 000.

Bouts of relative cross-asset calm have tended to be short-lived in 2022. China’s growth-sapping Covid lockdowns, a global wave of monetary tightening and the Ukraine war continue to cast a pall over the world economy. The Fed in a report warned of deteriorating liquidity conditions in key financial markets.

“For now investors need to be prepared for continued volatility,” Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management, wrote in a note. She added “sentiment is bearish” but not capitulating.

In the latest policy comments, Fed Bank of Atlanta President Raphael Bostic said he favours continuing to raise rates by half-point moves rather than anything larger. He said the odds for a 75-basis-point hike are low but added he’s taking nothing off the table.

Investors are awaiting the April US consumer-price index print on Wednesday to gauge whether inflation is peaking.

Here are key events to watch this week:

• Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams, Fed Governor Christopher Waller speak, Tuesday
• Atlanta Fed President Raphael Bostic speaks, Wednesday
• US CPI, Wednesday
• EIA crude oil inventory report, Wednesday
• San Francisco Fed President Mary Daly speaks, Thursday
• US PPI, initial jobless claims, Thursday
• University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.5% as of 5:53 a.m. in London. The S&P 500 fell 3.2%
• Nasdaq 100 futures rose 0.9%. The Nasdaq 100 fell 4%
• Japan’s Topix index shed 0.9%
• Australia’s S&P/ASX 200 Index dropped 1.2%
• South Korea’s Kospi index declined 0.8%
• China’s Shanghai Composite index rose 0.2%
• Hong Kong’s Hang Seng index was 2.8% lower
• Euro Stoxx 50 futures added 0.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.2% to $1.0578
• The Japanese yen was at 130.42 per dollar, down 0.1%
• The offshore yuan was at 6.7275 per dollar, up 0.4%

Bonds

• The yield on 10-year Treasuries was steady at 3.04%
• Australia’s 10-year bond yield fell three basis points to 3.53%

Commodities

• West Texas Intermediate crude was at $101.93 a barrel, down 1.1%
• Gold was at $1 862.60 an ounce, up 0.5%