Stock futures build on S&P 500's record rise: Markets Wrap

(Bloomberg) — European and U.S. stock futures rose, extending a rally in global stocks that pushed the S&P 500 index to a record high on Friday.

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In Asia, contracts rose after a rise in technology stocks pushed the S&P 500 above 4,800 last week on optimism over expected Federal Reserve interest rate cuts and the boom in artificial intelligence. Chinese stocks bucked the trend as pessimism over the country's faltering recovery led to further losses.

“We are moving towards an environment where the economic slowdown appears to be more of a soft landing while at the same time we are talking about interest rate cuts,” said Jun Bei Liu, fund manager at Tribeca Investment Partners in Sydney. “All things considered, things are looking pretty positive for the stock market.”

After hitting a low in October 2022, the S&P 500 has risen about 35% and surpassed its previous closing high of 4,796.56 on Friday. The index was the last of the three major U.S. stock benchmarks to close at record levels.

Asia's benchmark stock index erased earlier gains as the Hang Seng index fell 3% and benchmark indices in mainland China fell. China's commercial lenders left their key interest rates unchanged on Monday, in line with the central bank's decision last week to refrain from cutting borrowing costs.

The current low valuations of Chinese stocks are not enough to encourage investors to re-enter the markets, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. in Singapore. “We suspect they will provide more stimulus, but the question is whether they will be big enough to calm the markets,” he said of Chinese politicians.

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Oil prices fell as OPEC member Libya restarted production at its largest reserve, bolstering global supplies and overshadowing for now concerns over tensions in the Red Sea that are expected to continue to affect shipping.

The dollar weakened against most of its Group of 10 peers, paring slightly gains made earlier in the month. Treasuries rose slightly, with benchmark 10-year Treasury yields falling a basis point. Benchmark bonds had gained on Friday as a “Fed-friendly” survey from the University of Michigan showed a mix of high consumer confidence and lower inflation expectations.

This week, investors will turn their attention to the Bank of Japan, which began a two-day monetary policy meeting on Monday. The central bank is widely expected to leave its settings unchanged on Tuesday when it announces the results of its meeting.

Also in focus are the first estimate of US GDP for the fourth quarter on Thursday, the central bank meetings for Canada and Europe as well as South Korean economic performance data and the first European purchasing manager survey results for 2024.

Elsewhere, Ron DeSantis dropped out of the US presidential race ahead of Tuesday's New Hampshire primary to support Republican front-runner Donald Trump.

Important events this week:

• Leading index of the US Conference Board, Monday

• Bank of Japan interest rate decision, Tuesday

• Eurozone consumer confidence, Tuesday

• Netflix Inc. Reports Earnings; The streaming service is expected to post a strong finish to 2023 on Tuesday

• Japan trading, Wednesday

• Eurozone S&P Global Services & Manufacturing PMI, Wednesday

• UK S&P Global / CIPS Manufacturing PMI, Wednesday

• US S&P Global Services & Manufacturing PMI, Wednesday

• Tesla Inc. and International Business Machines Corp. (IBM) announces earnings on Wednesday

• European Central Bank interest rate decision, Thursday

• Germany IFO business climate, Thursday

• US GDP, initial jobless claims, durable goods, wholesale inventory, new home sales, Thursday

• LVMH, Northrop Grumman Corp., SK Hynix Inc. report earnings on Thursday

• Japan Tokyo CPI, Friday

• The Bank of Japan will release the minutes of its monetary policy meeting on Friday

• Personal income and expenses in the USA, Friday

• In China, the holiday rush begins ahead of the Lunar New Year next month, Friday

Shares

• S&P 500 futures rose 0.2% at 7:02 a.m. London time. The S&P 500 rose 1.2% on Friday

• Nasdaq 100 futures rose 0.6%. The Nasdaq 100 rose 2%

• Euro Stoxx 50 futures rose 0.6%

• Japan's Topix index rose 1.4%

• Hong Kong's Hang Seng Index fell 2.7%

• China's Shanghai Composite Index fell 2.7%

• Australia's S&P/ASX 200 index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0902

• The Japanese yen was little changed at 148.09 per dollar

• The offshore yuan was little changed at 7.2053 per dollar

• The Australian dollar fell 0.2% to $0.6585

• The British pound was little changed at $1.2708

Cryptocurrencies

• Bitcoin fell 1.4% to $41,158.99

• Ether fell 1.8% to $2,427.22

Tie up

• The yield on 10-year government bonds remained little changed at 4.12%

• Japan's 10-year yield fell 1.5 basis points to 0.650%

• Australia's 10-year yield fell six basis points to 4.23%

raw materials

• West Texas Intermediate crude fell 0.4% to $73.13 a barrel

• Spot gold fell 0.5% to $2,019.38 an ounce

This story was produced with support from Bloomberg Automation.

– With assistance from Garfield Reynolds.

(An earlier version of this story has been corrected to correct the reference to the Lunar New Year in the list of major events.)

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