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Stocks and bonds posted small moves on Monday as investors recalibrated their bets in the wake of last week’s selloff, which saw the steepest loss for the S&P 500 since October. The Stoxx 600 benchmark was little changed along with futures in the US, while Asian markets declined. Boeing Co shares are in focus as groundings of the 737 Max 9 aircraft gathered pace globally. Brent crude slid below $78 after Saudi Arabia cut official selling prices for all regions amid persistent weakness in the market.
Markets are looking for direction after global equities and US Treasuries slid the most since October last week on speculation the Federal Reserve was in no rush to reduce interest rates. The US inflation print due on Thursday as well as the start of earnings season at the end of the week may offer investors further catalysts.
Sentiment remains quite negative in China, Nomura Group analysts including Chetan Seth in Singapore wrote in a client note. “There have been more signs of support for the economy, but equity investors still do not appear convinced,” they said. In Europe, German factory orders rose much less than anticipated in November, a discouraging sign for Europe’s largest economy, data showed on Monday. Euro-zone retail sales and consumer confidence numbers due later in the day may give a better guide on the region’s economic recovery.
The yield on US Treasuries edged one basis point higher to 4.06%. Some traders are unfazed by the recent pullback, seeing it as a chance to seize on elevated yields before the Federal Reserve starts driving down rates.
The dynamic was on display Friday, when bond prices dipped after the Labor Department reported that job growth unexpectedly accelerated last month. But the selloff was curtailed because buyers swooped in as 10-year Treasury yields neared 4.1%, the highest since mid-December.
In commodities, Brent fell more than 1%, halting last week’s rally after the price cuts. The reductions underscored a worsening global outlook amid strong global supply, including from the US, and outweighed concern over Red Sea tensions.