European stocks extend 4-day slide on economic headwinds

Bloomberg

European equities extended a four-day slide as optimism over a potential downshift in the Federal Reserve rates hikes deflates in the face of economic headwinds.
The Stoxx Europe 600 slipped 0.2%, with property firms and banks pacing declines. Contracts on the S&P 500 steadied to trade little changed after the underlying benchmark posted the longest stretch of down days to begin a month since 2011.
Treasuries halted a rally that had sent the 10-year yield to an almost three-month low as investors braced for an economic downturn. The benchmark added four basis points to yield 3.45%, while a gauge of the
dollar ticked higher.
Traders now await Friday’s US producer price report and the Consumer Price Index print to get a read on how effective Fed policy has been to quell inflation, and whether the central bank will be able to notch down its aggressive campaign.
Strategists from Morgan Stanley to JPMorgan Chase & Co. have warned investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy. Belief in a dovish turn, reinforced in part by Fed officials themselves, sparked a 14% surge in the S&P 500 over seven weeks.
“Presumably if the Fed is pivoting this time around, it’s not for a good reason. It’s a deteriorating fundamental picture,” Joyce Chang, chair of global research at JPMorgan, said in an interview with Bloomberg TV on Thursday. “I mean, is that really a reason to be buying risk? I think it’s premature to say that there is a Fed pivot.”
Elsewhere in markets, oil rose after a four-day drop as investors weighed the impact of China’s moves to ease virus curbs against a looming US slowdown.
The Stoxx Europe 600 fell 0.2% as of 9:52 am London time and futures on the S&P 500 were little changed.
While futures on the Nasdaq 100 rose 0.1%, futures on the Dow Jones Industrial Average were little changed and the MSCI Asia Pacific Index rose as much as 0.4%. The MSCI Emerging Markets Index rose 1%.
The Bloomberg Dollar Spot Index rose 0.2% and the euro was little changed at $1.0497.
While the Japanese yen fell 0.3% to 137.05 per dollar, the offshore yuan fell 0.1% to 6.9698 per dollar. The British pound fell 0.3% to $1.2169.
The yield on 10-year Treasuries advanced four basis points to 3.45% and Germany’s 10-year yield was little changed at 1.78%. Britain’s 10-year yield was little changed at around 3.05%.
Brent crude rose 0.9% to $77.84 a barrel and spot gold fell 0.2% to $1,782.88 an ounce.