(Bloomberg) — Stocks fell with U.S. futures as investors weighed risks to global growth ahead of a key U.S. employment report. Treasury yields extended an advance.
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Almost all sectors were in the red among European equities, with data showing German factory orders plunged in August. S&P 500 and Nasdaq 100 contracts declined after Tuesday’s rebound for the underlying gauges. MSCI Inc.’s Asia-Pacific index retreated for a fourth session.
Markets have turned more volatile since global stocks hit a record last month, with an energy crisis adding to investor worries about inflationary pressures, slowing growth and the prospect of reduced Federal Reserve stimulus. A private U.S. payrolls report later today may offer clues on the country’s labor market ahead of the keenly-watched government data due Friday.
“For the last five or six months we’ve entered a period of kind of a mini-cycle in the U.S. where you’ve got a changing Fed regime, and we are at the extended end of a recovery,” Kieran Calder, Union Bancaire Privee Head of Equity Research for Asia, said on Bloomberg Television. “It leaves the market vulnerable to external shocks and increased volatility.”
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The yields on 10-year and 30-year U.S. Treasuries both reached the highest since June, while oil held near a seven-year high. Faster-than-expected U.S. service-sector activity and price pressures from spiraling costs for crude oil and natural gas are adding to the case for a reduction in Fed bond-buying.
“Right now you’re seeing inflation risk really start to percolate and I do think that you’re going to see that really eat into margins as we go through the fourth quarter into 2022,” Erin Browne, multi-asset portfolio manager at Pimco, said on Bloomberg Television. “The energy crisis that’s starting to loom in Europe is a real risk that is being underestimated by the market right now.”
Elsewhere, the New Zealand dollar was the worst performer among the among Group of 10 currencies after the central bank raised interest rates for the first time in seven years, but stopped short of providing a timeline for future increases.
Bitcoin held above the $51,000 mark.
For more market analysis, read our MLIV blog.
Here are some events to watch this week:
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 fell 1.2% as of 8:27 a.m. London time
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Futures on the S&P 500 fell 0.7%
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Futures on the Nasdaq 100 fell 0.9%
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Futures on the Dow Jones Industrial Average fell 0.6%
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The MSCI Asia Pacific Index fell 0.6%
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The MSCI Emerging Markets Index fell 0.5%
Currencies
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The Bloomberg Dollar Spot Index rose 0.3%
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The euro fell 0.2% to $1.1572
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The Japanese yen fell 0.1% to 111.61 per dollar
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The offshore yuan fell 0.1% to 6.4579 per dollar
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The British pound fell 0.4% to $1.3581
Bonds
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The yield on 10-year Treasuries advanced three basis points to 1.55%
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Germany’s 10-year yield advanced three basis points to -0.16%
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Britain’s 10-year yield advanced five basis points to 1.13%
Commodities
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Brent crude rose 0.5% to $82.97 a barrel
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Spot gold fell 0.5% to $1,751.64 an ounce
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