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Stocks, Futures Mixed as Bond Yields March Higher: Markets Wrap

(Bloomberg) — Stocks were mixed Monday as traders weighed a global advance in sovereign bond yields and corporate developments.

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Europe’s Stoxx 600 Index and U.S. futures rose, while Asian shares fell. A dollar gauge was little changed and oil fluctuated. U.S. stock and bond markets are shut Monday for a holiday.

Bond yields rose around the world after U.S. Treasuries tumbled Friday on concerns about more hawkish Federal Reserve policy to fight inflation. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Friday the central bank could raise rates as many as seven times, while billionaire investor Bill Ackman argued for a bigger-than-expected 50 basis point move in March to “restore its credibility.”

The advance of the omicron virus strain, the start of the earnings season and a boom in mergers and acquisitions are also coloring sentiment. Investors are looking for signs that corporate profits can help arrest a retreat in global equities led in part by a slide in U.S. technology shares.

“Given the record inflation backdrop and historically tight labor market, investor focus is on margins — demonstrating pricing power, passing on rising costs to the customer,” Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, wrote in a note.

Among individual movers on Monday, Unilever Plc shares fell more than 6%, while GlaxoSmithKline Plc rose by a similar amount after Glaxo said over the weekend that it rejected three offers from the consumer-products company for its consumer health unit. Glencore Plc rose to the highest in almost a year.

In corporate developments, Credit Suisse Group AG’s Chairman Antonio Horta-Osorio was ousted for breaching Covid quarantine rules, throwing the Swiss financial giant into fresh turmoil as it struggles to emerge from a series of scandals.

Meanwhile, China’s central bank eased policy on Monday to counter an economic slowdown. A real-estate slump and partial Covid shutdowns are among the challenges for the world’s second-largest economy. The move contrasts with the shift toward tighter monetary policy in the U.S. and elsewhere to contain price pressures.

“The PBOC really has started the New Year in a different position to, let’s say, other global banks and we do expect to see further easing or supportive measures, both monetary-wise as well as from a fiscal stance,” Catherine Yeung, investment director at Fidelity International, said on Bloomberg Television.

For more market analysis, read our MLIV blog.

What to watch this week:

  • Goldman Sachs, Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among companies publishing earnings during the week

  • U.S. data includes Empire manufacturing Tuesday, housing starts Wednesday and jobless claims Thursday

  • Bank of Japan monetary policy decision, Tuesday

  • Interest-rate decisions due from nations including Indonesia, Malaysia, Norway, Turkey and Ukraine, Thursday

  • EIA crude oil inventory report, Thursday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.6% as of 9:50 a.m. London time

  • Futures on the Nasdaq 100 rose 0.2%

  • Futures on the Dow Jones Industrial Average rose 0.2%

  • The MSCI Asia Pacific Index fell 0.8%

  • The MSCI Emerging Markets Index fell 0.5%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.1418

  • The Japanese yen fell 0.3% to 114.48 per dollar

  • The offshore yuan was little changed at 6.3517 per dollar

  • The British pound was little changed at $1.3676

Bonds

  • Germany’s 10-year yield advanced two basis points to -0.03%

  • Britain’s 10-year yield advanced three basis points to 1.18%

Commodities

  • Brent crude was little changed

  • Spot gold rose 0.2% to $1,821.65 an ounce

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©2022 Bloomberg L.P.

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