Stocks were mixed Friday and global bonds slumped into their first bear market in a generation ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
(Bloomberg) — Stocks were mixed Friday and global bonds slumped into their first bear market in a generation ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
US futures were little changed, while European stocks climbed and Asian shares fell. A dollar gauge fluctuated near a record high and the euro strengthened.
The jobs update Friday is expected to show healthy payrolls growth and follows a stronger-than-expected US manufacturing report. Traders increasingly anticipate another large 75 basis points Fed rate rise to cool inflation.
Concern that rising rates will hurt growth has weighed on markets, pushing the Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds down more than 20% from a 2021 peak.
Oil rose to pare a hefty weekly decline. The Group of Seven most industrialized countries are poised to agree to introduce a price cap for global purchases of Russian oil as Russia looks set to resume gas supplies through its key pipeline.
Meanwhile, zinc headed for its biggest weekly loss in over a decade on concern Chinese demand will be hamstrung by new virus restrictions. Gold and Bitcoin rose.
Lululemon Athletica Inc. jumped in premarket trading after raising its full-year outlook. That gave a boost to European peers JD Sports Fashion Plc, Puma SE and Adidas AG.
But traders remain cautious. A gauge of world shares is set for its worst week since June, roiled by ebbing bets on tempered Fed tightening after US central bank officials made it clear that they see the need for restrictive monetary settings for some time.
Investors are also exiting global stock funds at a fast pace, with the fourth-largest weekly outflows of the year in the week through Aug. 31, according to BofA citing EPFR Global data.
“We don’t have a lot of reasons to be bullish in this type of environment for the next couple of weeks and months,” Meera Pandit, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “Yet when we think about the longer term perspective and the longer term investor, these are the types of level that can be fruitful in the long run.”
The payrolls report later Friday is projected to show a 298,000 gain and solid wage growth. Federal Reserve Bank of Atlanta President Raphael Bostic said there’s still some work to do to contain price pressures.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept. 2
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
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Some of the main moves in markets:
Stocks
- Futures on the S&P 500 were unchanged as of 6:15 a.m. New York time
- Futures on the Nasdaq 100 fell 0.1%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 rose 0.6%
- The MSCI World index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.6% to $1.0008
- The British pound rose 0.2% to $1.1572
- The Japanese yen was little changed at 140.32 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 3.26%
- Germany’s 10-year yield advanced four basis points to 1.60%
- Britain’s 10-year yield advanced three basis points to 2.91%
Commodities
- West Texas Intermediate crude rose 2.2% to $88.51 a barrel
- Gold futures rose 0.5% to $1,717.50 an ounce
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