Stocks fluctuate as traders mull rates, China stimulus

Bloomberg

US equity futures and European stocks fluctuated as investors assessed prospects for less-aggressive central bank tightening and weighed China’s latest move to stimulate its economy as Covid-19 infections rise.
S&P 500 contracts inched higher before an abbreviated Thanksgiving weekend cash trading session on Wall Street. Those on the Nasdaq 100 were steady. Energy companies climbed in premarket as oil prices clawed back some of their weekly decline.
Apple Inc. slipped after a report that production of iPhones in November could fall by at least 30% at a Chinese plant where worker protests have disrupted operations.
European energy stocks were higher too, helping to keep the Stoxx 600 Index on course for a sixth week of gains, the longest winning streak in a year.
The dollar strengthened after three straight days of losses. Treasuries steadied following a post-holiday advance during Asian trading.
US stocks are poised to end the shortened trading week higher, rising after recent commentary from Federal Reserve officials that supported the case for a slower pace of interest-rate increases. Fed minutes published on November 24 showed that officials concluded the central bank should soon moderate the pace of rate hikes to mitigate overtightening risks.
Oil recouped some of its third weekly loss as the European Union weighed a higher-than-expected price cap on flows of Russian crude and slowdown concerns threaten the outlook for energy demand. Gold was poised for a modest weekly gain.
China’s central bank on Friday cut the amount of cash lenders must hold in reserve for the second time this year, an escalation of support for an economy racked by surging Covid-19 cases and a continued property downturn.
The outlook for Chinese markets is improving, despite the current flareup in virus cases, according to Jun Bei Liu, a portfolio manager at Tribeca Investment Partners.
“In the next 12 months things will get better. We have seen this playbook before across other economies,” she said on Bloomberg Television. “We’ll begin to see outperformance very soon in the next few quarters.”
Meanwhile, JPMorgan Chase & Co. quantitative strategist Khuram Chaudhry said the rebound in European equities driven by expectations of peaking inflation and bond yields is nothing but a bear market rally and that investors are “jumping the gun.” He forecasts euro-area equities will eventually recover “later in 2023.”
Futures on the S&P 500 rose 0.2% as of 6:34 am New York time and futures on the Nasdaq 100 were unchanged.
While futures on the Dow Jones Industrial Average rose 0.2%, the Stoxx Europe 600 rose 0.1%. The MSCI World index was little changed.
While the Bloomberg Dollar Spot Index rose 0.2%, the euro was little changed at $1.0402.
The British pound was little changed at $1.2103 and the Japanese yen drops 0.6% to 139.33 per dollar.
The yield on 10-year Treasuries advanced one basis point to 3.71% and Germany’s 10-year yield advanced seven basis points to 1.93%. Britain’s 10-year yield advanced five basis points to 3.09%
West Texas Intermediate crude rose 2.4% to $79.83 a barrel and gold futures also climb 0.4% to $1,768 an ounce.