Global stock rebound fizzles; US futures drop: markets wrap

The rebound in global stocks eased on Thursday as investors weighed whether a recovery in technology shares could overcome lingering concern about valuations. The dollar steadied after declines.

US and European futures edged lower, while equities in Japan and China retreated from session highs. Stocks in Hong Kong fluctuated. Earlier, the S&P 500 rose the most since June overnight and the Nasdaq rebounded following an 11% rout that took the gauge down to its 50-day moving average, a closely-watched technical level. Indonesian shares slumped after officials said the capital, Jakarta, will bring back social distancing measures due to a spike in Covid-19 cases.

Elsewhere, Treasuries ticked higher. The pound inched lower to extend recent declines on worries that trade talks with the European Union could collapse over changes to the Brexit withdrawal deal. Crude oil slipped and gold was steady.

With volatility remaining elevated, investors will be on guard for any signs that the selling in stocks may resume. Thursday brings the European Central Bank’s latest policy decision and weekly jobless claims data in the US.

“We are in a recovery but this recovery is about to slow down,” David Kelly, chief global strategist at JPMorgan Asset Management, said on Bloomberg TV. “It’s important for investors at this stage to be disciplined and realise that just because we’ve seen some good economic numbers and because the market seems to be OK here, don’t take your eye off the ball.”

Here are some key events coming up:

  • The ECB is expected to hold rates steady on Thursday but indicate that downside risks have intensified, suggesting further easing is possible before year-end.
  • The US releases initial jobless claims numbers Thursday.
  • US CPI data is due Friday, with consumer prices expected to have risen in August.

These are the main moves in markets:

Stocks

  • S&P 500 futures dipped 0.3% as of 1:10 p.m. in Tokyo. The gauge rose 2% on Wednesday.
  • Topix index rose 0.8%.
  • Hong Kong’s Hang Seng was little changed.
  • Shanghai Composite added 0.3%.
  • Australia’s S&P/ASX 200 Index gained 0.1%.
  • Indonesia’s Jakarta Composite Index slumped 5%.
  • Euro Stoxx 50 futures dipped 0.1%.

Currencies

  • The Bloomberg Dollar Spot Index was flat after falling 0.4%.
  • The euro bought $1.1821, up 0.2%.
  • The yen rose 0.1% to 106.08 per dollar.
  • The offshore yuan slipped 0.1% to 6.8392 per dollar.
  • The pound was at $1.2994, down 0.1%.

Bonds

  • The yield on 10-year Treasuries dipped to 0.68%.
  • Australia’s 10-year yield rose four basis points to 0.93%.

Commodities

  • West Texas Intermediate crude fell 0.7% to $37.79 a barrel.
  • Gold was at $1,946.61 an ounce, little changed.
© 2020 Bloomberg

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