Stocks start the eventful week cautiously: Markets Wrap

(Bloomberg) — Global stocks posted modest moves at the start of a busy week of economic data and central bank meetings that will test investor optimism about interest rates falling soon.

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U.S. futures contracts fell less than 0.2%. In corporate news, Macy's Inc. rose 22% premarket after it reportedly received a $5.8 billion takeover offer from Arkhouse Management and Brigade Capital Management. Snap Inc. and Pinterest Inc. rose after analyst upgrades. The European Stoxx 600 index fell slightly.

In currencies, the yen extended losses to 1% after Bloomberg News reported that Bank of Japan officials see little reason to rush to end the world's last negative interest rate, citing insufficient evidence that wage growth is driving inflation . The dollar rose while the 10-year Treasury yield rose three basis points to 4.25%.

Traders await U.S. inflation numbers on Tuesday, a Federal Reserve policy decision on Wednesday and retail sales on Thursday. Policy decisions at the European Central Bank and the Bank of England add to a crowded calendar.

“This is also likely to be the last busy week for the year after which we enter the holiday illiquidity phase,” said Mohit Kumar, chief Europe economist at Jefferies International. “While central banks are likely to push back on rate cuts, we do not see a sharp rise in interest rates that would negate the upward momentum.”

Stronger-than-expected U.S. economic data, boosting optimism that the Fed can curb inflation without triggering a recession, fueled a six-week rally in the S&P 500. The index has climbed to its highest level since March 2022, and several Wall Street strategists are expecting more gains to come next year.

The story goes on

John Stoltzfus, chief investment strategist at Oppenheimer & Co., along with Tom Lee of Fundstrat Global Advisors LLC, gave the most bullish forecast on Monday, predicting a record high of 5,200 points for the U.S. benchmark by the end of 2024. That's about 13% higher than the current level. A Citigroup Inc. team led by Scott Chronert expects the value to rise to around 5,100.

Mark Haefele, chief investment officer at UBS Global Wealth Management, is among the more cautious investors. “US economic data will have to walk a fine line in the coming months to sustain the recent rally,” he said. “While we expect stocks to maintain their recent gains and rise slightly in 2024, stock markets are already pricing in a lot of good news.” He sees the S&P 500 at 4,700 at the end of 2024.

Elsewhere, oil prices slipped further on Monday after fears that supply was outstripping demand triggered its longest weekly losing streak in five years.

Bitcoin experienced another bout of its infamous volatility in a short but sharp plunge towards $40,000 amid a broader crypto sell-off. The largest token fell as much as 7.5% to $40,521 before paring some of the losses. Cryptocurrency-related stocks fell.

Important events this week:

• New Argentine President Javier Milei is expected to call Congress into an extraordinary session on Monday

• Britain's CBI releases its latest economic forecast on Monday

• RBA Governor Michele Bullock speaks on Tuesday

• Japanese producer prices, Tuesday

• Inflation in India, Tuesday

• Inflation in Brazil, Tuesday

• Unemployment in Britain, Tuesday

• US inflation, Tuesday

• Eurozone industrial production, Wednesday

• Interest rate decision for Brazil, Wednesday

• Federal Reserve interest rate decision, Wednesday

• Unemployment in Australia, Thursday

• ECB interest rate decision, Thursday

• BOE interest rate decision, Thursday

• Interest rate decision Norway, Thursday

• US retail sales, Thursday

• China 1-Year MLF, Friday

• China's retail sales, industrial production and unemployment rate, Friday

• Eurozone PMIs, Friday

• UK manufacturing PMI, Friday

Some of the key moves in the markets:

Shares

• S&P 500 futures fell 0.1% at 6:01 a.m. New York time

• Nasdaq 100 futures fell 0.2%

• The futures on the Dow Jones Industrial Average hardly changed

• The Stoxx Europe 600 fell 0.2%

• The MSCI World Index has hardly 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

Tie up

• The 10-year Treasury yield rose three basis points to 4.25%

• The yield on 10-year German government bonds fell two basis points to 2.25%

• The yield on 10-year British government bonds remained little changed at 4.04%

raw materials

• West Texas Intermediate crude fell 1.1% to $70.45 a barrel

• Spot gold fell 0.6% to $1,993.51 an ounce

This story was produced with support from Bloomberg Automation.

– With assistance from Matthew Burgess, Sagarika Jaisinghani and Pearl Liu.

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