Stocks Edge Lower as China Data Dent Momentum: Markets Wrap

(Bloomberg) — European stocks were little changed and US equity futures slipped as Chinese economic data dented optimism after last week’s global share-market rally.

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The Stoxx 600 index fell less than 0.1%, while Nasdaq futures retreated 0.2%, following Asian stocks lower. Treasury 10-year yields climbed as much as five basis points to 4.51%, the highest in more than a week. The dollar was little changed.

A slowdown in China’s industrial profit growth added to concern about deflation in the world’s second-largest economy. Fresh economic data this week will help traders gauge whether the gains for stocks and bonds seen so far this month can extend into December. Statistics include euro-zone inflation figures, China PMIs and US personal consumption numbers on Thursday, and US and euro-area PMIs on Friday.

“We’ve seen US bond yields gap higher at the open, and that has weighed on equity market sentiment to send US futures down alongside Chinese markets that are already under pressure from weak industrial profits,” said Matt Simpson, a senior market strategist at City Index Inc.

Read More: November Equity Rally Could Face December Bumps: Taking Stock

The cautious start comes despite the VIX index, known as Wall Street’s “fear gauge,” falling last week to its lowest level since January 2020. Markets have been buoyed by a growing assumption that further interest-rate hikes from the Federal Reserve and European Central Bank are unlikely.

In earnings due this week, Crowdstrike Holdings Inc. will underscore how businesses are prioritizing cybersecurity after recent high-profile corporate hacks, while Salesforce Inc. and Dell Technologies Inc. are expected to post slower sales growth as overall corporate expenditure tightens.

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Traders will also be keeping an eye on gold and oil after Israel and Hamas signaled that a temporary cease-fire in Gaza could be extended beyond Monday to allow for the release of more hostages and prisoners. Oil fell for a fourth day as traders looked ahead to this week’s delayed OPEC+ meeting.

In Asia, the subdued growth at Chinese industrial companies may keep firms cautious about expanding or hiring more, which in turn could add more pressure on prices.

The Hang Seng China Enterprises Index slipped as much as 1.4%, while the CSI 300 Index fell as much as 1.3%. The yen strengthened against all its Group-of-10 peers.

“The profit numbers show that current recovery momentum is still fairly fragile,” Dong Chen, head of Asia macroeconomic research at Pictet Wealth Management, said in an interview with Bloomberg Television. “We still have a long way to go to get out of the woods.”

Key events this week:

• European Central Bank President Christine Lagarde appears in parliamentary committee, Monday

• Australia retail sales, Tuesday

• NATO foreign ministers meet, Tuesday

• US Conf. Board consumer confidence, Tuesday

• Fed Governor Chris Waller, Chicago Fed President Austan Goolsbee speak at different events, Tuesday

• Australia CPI, Wednesday

• Reserve Bank of New Zealand policy decision, Wednesday

• Eurozone economic confidence, consumer confidence, Wednesday

• Bank of England Governor Andrew Bailey speaks, Wednesday

• US wholesale inventories, GDP, Wednesday

• Fed releases its Beige Book of regional economic activity, Wednesday

• Cleveland Fed President Loretta Mester speaks, Wednesday

• China non-manufacturing and manufacturing PMIs, Thursday

• Eurozone CPI, Thursday

• US PCE deflator, Thursday

• OPEC+ meeting, focused on finalizing output levels for 2024, Thursday

• China Caixin manufacturing PMI, Friday

• Eurozone manufacturing PMI, Friday

• UK S&P Global/CIPS Manufacturing PMI, Friday

• US construction spending, ISM Manufacturing, light vehicle sales, Friday

• Fed Chair Jerome Powell, Chicago Fed President Austan Goolsbee speak at separate events, Friday

Some key moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:20 a.m. London time

• S&P 500 futures fell 0.2%

• Nasdaq 100 futures fell 0.2%

• Futures on the Dow Jones Industrial Average fell 0.1%

• The MSCI Asia Pacific Index fell 0.2%

• The MSCI Emerging Markets Index fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0945

• The Japanese yen rose 0.3% to 149.02 per dollar

• The offshore yuan was little changed at 7.1526 per dollar

• The British pound was little changed at $1.2614

Cryptocurrencies

• Bitcoin fell 0.8% to $37,342.25

• Ether fell 1.4% to $2,046.05

Bonds

• The yield on 10-year Treasuries was little changed at 4.47%

• Germany’s 10-year yield declined two basis points to 2.63%

• Britain’s 10-year yield declined three basis points to 4.26%

Commodities

• Brent crude fell 0.8% to $79.91 a barrel

• Spot gold rose 0.6% to $2,012.22 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess.

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