(Bloomberg) — Stocks slipped Monday as investors weighed inflation risks and an uneven global recovery that marred the latest upbeat economic outlook from Washington. The dollar ticked up.
Europe’s main gauge opened 0.3% lower, with banks and miners posting the biggest declines in the Stoxx Europe 600 Index. The moves were mirrored in U.S. equity futures, which retreated following a third straight week of gains and fresh records for the S&P 500 Index.
The yield on 10-year Treasuries fell before a round of auctions that will be widely watched for their potential to extend the rate surge that’s shaken stocks to commodities to emerging markets this year. The U.S. sells three-, 10- and 30-year Treasuries at the start of the week.
China Led The Recovery Trade; Now Almost Everyone Is Cautious
While the U.S. recovery is accelerating, economies are still at risk from rising Covid-19 cases and vaccination setbacks. At the same time, massive government spending and central-bank stimulus could drive excessive inflation. In an interview aired Sunday with CBS’s 60 Minutes, Federal Reserve Chair Jerome Powell said any rebound in inflation will be temporary.
“The big thing markets are trying to price currently is what does the world look like with another period of U.S. economic outperformance,” said Kyle Rodda, analyst at IG Markets Ltd. “Europe can’t get its economic or health affairs in order, China doesn’t look like it wants to run its economy too hot.”
Oil fell and Bitcoin rose above $60,000, not far from its all-time high. The forthcoming listing of cryptocurrency exchange Coinbase Global Inc. in the U.S. has put the spotlight back on the digital-token sector.
Elsewhere, traders will be watching for any further escalation between Russia and Ukraine, after Russia warned that growing violence in Ukraine could set off a broader military conflict.
Some key events to watch this week:
Banks and financial firms begin reporting first-quarter earnings, including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, Goldman Sachs Group Inc.U.S. officials and company executives are due to discuss the global shortage of computer chips on Monday.The U.S. releases inflation data Tuesday.Chinese trade data are scheduled for Tuesday.Economic Club of Washington hosts Fed Chair Jerome Powell for a moderated Q&A on Wednesday.U.S. Federal Reserve releases Beige Book on Wednesday.U.S. data including initial jobless claims, industrial production and retail sales come Thursday.China economic growth, industrial production and retail sales figures are on Friday.
These are some of the main moves in financial markets:
Stocks
Futures on the S&P 500 Index sank 0.3% as of 8:45 a.m. London time.The Stoxx Europe 600 Index sank 0.3%.The MSCI Asia Pacific Index sank 0.9%.The MSCI Emerging Market Index sank 1.2%.
Currencies
The Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to $1.1877.The British pound gained 0.1% to $1.3726.The onshore yuan was little changed at 6.554 per dollar.The Japanese yen strengthened 0.2% to 109.49 per dollar.
Bonds
The yield on 10-year Treasuries sank two basis points to 1.64%.The yield on two-year Treasuries decreased less than one basis point to 0.15%.Germany’s 10-year yield dipped two basis points to -0.33%.Japan’s 10-year yield dipped one basis point to 0.105%.Britain’s 10-year yield declined one basis point to 0.76%.
Commodities
West Texas Intermediate crude fell 0.9% to $58.81 a barrel.Brent crude fell 0.7% to $62.50 a barrel.Gold weakened 0.3% to $1,739.40 an ounce.
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