Stocks Set for Mixed Start as Traders Mull Growth: Markets Wrap

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(Bloomberg) — Stocks looked set for a mixed start Monday as traders await the earnings season and weigh the risks to the pandemic recovery from inflation pressures and an energy crunch. The dollar was little changed.

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Equity futures slipped for Japan, were steady for Australia and earlier signaled gains in Hong Kong. U.S. contracts dipped after the S&P 500 and Nasdaq 100 declined Friday in the wake of U.S. jobs growth data that fell significantly short of expectations while also showing a jump in earnings.

Treasuries retreated after the report, taking the 10-year yield past 1.6%. The wage gains and a jump in energy costs highlight price pressures that are adding to the case for tighter monetary policy. Many strategists expect the Federal Reserve to proceed with a tapering of bond purchases in coming weeks. There’s no cash Treasuries trading Monday due to a U.S. holiday.

West Texas Intermediate crude was trading at around the highest since 2014. New Zealand’s dollar dropped amid rising Covid-19 cases there.

In the U.K., Bank of England officials moved to reinforce signals of an imminent rise in U.K. interest rates to curb inflation. Aside from central bank tightening, investors are also braced for upcoming reports on third-quarter company profits and monitoring the debt woes and slowdown in China’s property sector.

“The tapering is very much on track for November,” Simon Ballard, First Abu Dhabi Bank chief economist, said on Bloomberg Television. In terms of Fed rate hikes, the jobs report puts the “focus on later rather than sooner.”

Goldman Sachs Group Inc. economists cut their forecasts for U.S. growth this year and next, blaming a delayed recovery in consumer spending. The declines were mostly offset by upgrades to their projections for the following two years.

Elsewhere, tension over Taiwan is simmering. President Tsai Ing-Wen said the island is facing “unprecedented challenges” and will defend its sovereignty, pushing back after Chinese leader Xi Jinping declared a day earlier that unification will be achieved. Taiwan’s markets are closed for a holiday.

In cryptocurrencies, Bitcoin edged down to trade around $55,000.

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.3% as of 7:48 a.m. in Tokyo. The S&P 500 fell 0.2%

  • Nasdaq 100 futures lost 0.4%. The Nasdaq 100 declined 0.5%

  • Nikkei 225 futures fell 0.4%

  • Australia’s S&P/ASX 200 Index futures were little changed

  • Hang Seng Index futures rose 0.8% earlier

Currencies

  • The Japanese yen was at 112.29 per dollar

  • The offshore yuan traded at 6.4448 per dollar

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was at $1.1571

Bonds

Commodities

  • West Texas Intermediate crude rose 0.7% to $79.88 a barrel

  • Gold was at $1,754.05 an ounce, down 0.2%

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