Stocks, futures mixed as bond yields march higher

 

Bloomberg

Stocks were mixed on Monday as traders weighed a global advance in sovereign bond yields and the start of the earnings season.
Media, miners and healthcare led an advance in Europe’s Stoxx 600 Index, while Nasdaq 100 futures fall. A dollar gauge was little changed and oil ticked up. US stock and bond markets are shut on Monday for a holiday.
Bond yields rise around the world after US Treasuries tumbled on concerns about more hawkish Federal Reserve monetary policy to fight inflation. Billionaire investor Bill Ackman said the Fed should raise its key interest rate by a bigger-than-expected 50 basis points in March to “restore its
credibility.”
The advance of the Omicron virus strain and corporate earnings are also colouring sentiment. Investors are looking for signs that corporate profits can help arrest a retreat in global equities led in part by a slide in US 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, GlaxoSmithKline Plc shares rise more than 5% after rejecting an offer from Unilever Plc for its consumer health unit, while Unilever fell by a similar amount. Glencore Plc rose to the highest in almost a year.
In corporate developments, Credit Suisse Group AG’s Chairman Antonio Horta-Osorio resigned after just nine months in the role, following a series of missteps including reported breaches of Swiss and UK quarantine rules that eroded
confidence in his leadership.
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 US 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 the Fidelity International, said on Bloomberg
Television.
Meanwhile, Goldman Sachs, Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among companies who will publish earnings
during the week.
The Stoxx Europe 600 rises 0.3% as of 8:35 am London time and futures on the Nasdaq 100 also drop 0.2%.
While futures on the Dow Jones Industrial Average were little changed, the MSCI Asia Pacific Index falls 0.8%. The MSCI Emerging Markets Index also slumps 0.5%.
The Bloomberg Dollar Spot Index was little changed and the euro rises 0.2% to $1.1431. The Japanese yen falls 0.1% to 114.32 per dollar and the offshore yuan was little changed at 6.3516 per dollar and the British pound was little changed at $1.3684.
While Germany’s 10-year yield advanced one basis point to -0.03%, Britain’s 10-year yield advanced two basis points to 1.17%.
Brent crude rises 0.1% to $86.15 a barrel and spot gold rises 0.3% to $1,822.88 an ounce.

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