European stocks, futures drop as stagflation worries deepen

Bloomberg

European stocks and US index futures declined as concerns about slowing growth and persistently high inflation kept
investors on the edge.
Contracts on the S&P 500 Index fall 0.5% after the underlying gauge posted the biggest weekly loss since February. Iron ore to aluminum rallied as a global supply crunch turned commodities into a sellers’ market. West Texas Intermediate fluctuated around $76 per barrel before an Opec+ meeting to discuss production policy.
Global markets have taken a risk-off turn as the post-pandemic recovery stalls on supply shortages in everything from semiconductors to coffee. A spreading energy crunch has added to concern elevated inflation will be longer-lasting than policy makers predict. Risks are multiplying at a time investors are bracing for Federal Reserve tapering as early as next month.
“The global chip and energy shortage is getting worse, the inflation is rising, the recovery may be slowing, and that puts central banks between a rock and a hard place,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “The best they could do is to do nothing, or to tighten their monetary policy to avoid losing control on the economy.”
Oil futures were mixed amid waning expectations that Opec+ members will consider boosting output more than planned. Treasury yields edged higher, with the 10-year rate adding two basis points. The dollar rose modestly, after two days of losses.
In Europe, banks and carmakers led losses in the benchmark Stoxx 600 gauge. Wm Morrison Supermarkets Plc declined 3.8% after CD&R emerged as the highest bidder for the British grocer, though analysts said the offer terms
resulting from the auction process were disappointing.
Japanese and Hong Kong shares dropped after trading in the shares of Evergrande were suspended in Hong Kong, along with those of its property management arm, amid reports of a unit stake sale. Mainland
Chinese markets are closed for the Golden Week holidays.
The Stoxx Europe 600 falls 0.5% as of 9:36 am London time and futures on the S&P 500 also drop 0.5%.
While futures on the Nasdaq 100 fall 0.6%, futures on the Dow Jones Industrial Average also slumped by 0.5%. The MSCI Asia Pacific Index falls 0.5% and the MSCI Emerging Markets Index also drops 0.5%.
While the Bloomberg Dollar Spot Index was little changed, the euro rises 0.1% to $1.1610 and the Japanese yen falls 0.1% to 111.19 per dollar. The offshore yuan falls 0.3% to 6.4570 per dollar and the British pound was little changed at $1.3547.
While the yield on 10-year Treasuries advanced two basis points to 1.48%, Germany’s 10-year yield advanced one basis point to -0.21% and Britain’s 10-year yield advanced two basis points to 1.02%. While Brent crude was little changed, spot gold falls 0.6% to $1,751 an ounce.