US stocks and futures fall on Fed price: markets close

US stocks and futures fall on Fed price: markets close

(Bloomberg) — Stocks tumbled along with U.S. stock futures on Monday on escalating threats to global economic growth, in particular the Federal Reserve’s commitment to tighter currency settings to curb inflation.

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Losses for stocks in Japan, Australia and South Korea were in the 1% range after the worst week for global equities since late June.

S&P 500, Nasdaq 100 and European contracts all suffered losses and a dollar indicator peaked for more than a month, further signs of investor caution.

Australian and New Zealand sovereign bonds tumbled and the 10-year US Treasury yield rose to around 2.99%, extending a sell-off from Friday.

A bounce in global equities from June’s bear market lows has begun to cool, pressured by repeated warnings from the Fed that interest rates are rising. Worrying global economic developments, including a recent power outage in a Chinese industrial hub, are also looming over investors.

Key to the markets this week is the Fed symposium in Jackson Hole, Wyoming. The recent rally in equities has loosened financial conditions, making it harder to fight inflation.

The symposium gives Fed Chair Jerome Powell a platform to reset market expectations from a pivot to slower rate hikes. The latest bets have helped spur the recent rally in equities but are vulnerable to the possibility of persistently high price pressures even as economic growth stumbles.

‘Stay Hawkish’

“Central bankers, including Fed Chair Powell, are likely to remain steadfast in dealing with inflation, albeit with a bit of caution given the emerging economic crisis,” wrote Shane Oliver, head of investment strategy at AMP Services Ltd. , in a statement. Note.

In China, Bloomberg Economics expects prime lending rates to drop 10 basis points on Monday as banks follow the People’s Bank of China’s decision to cut a key interest rate.

The world’s second-largest economy faces mobility restrictions amid rising Covid cases and ongoing problems in the real estate sector, as well as an energy crisis in Sichuan Province, a major manufacturing hub.

The Chinese demand outlook is weighing on crude, which has fallen below $90 a barrel. Traders monitor Iran’s nuclear talks that could lead to more supplies.

What to watch this week:

  • Primary lending rates in China, Monday

  • US New Home Sales, S&P Global PMIs, Tuesday

  • Fed’s Neel Kashkari speaks at Q&A, Tuesday

  • US Durable Goods, MBA Mortgage Applications, Pending Home Sales, Wednesday

  • US GDP, initial unemployment insurance claims. Thursday

  • Annual Fed Policy Symposium in Jackson Hole, Wyoming, Thursday

  • ECB July Minutes, Thursday

  • Fed Chair Powell Speaks at Jackson Hole, Friday

  • US Consumer Income, PCE Deflator, Friday

Some of the main movements in the markets:

Actions

  • S&P 500 futures were down 0.6% at 9:26 am in Tokyo. The S&P 500 is down 1.3%

  • Nasdaq 100 futures were down 0.7%. The Nasdaq 100 is down 2%

  • Japan’s Topix index fell 0.7%

  • Australia’s S&P/ASX 200 index fell 1.1%

  • South Korea’s Kospi index fell 1.2%

  • Hang Seng futures fell 0.9% earlier

Coins

  • The Bloomberg Dollar Spot Index rose 0.2%

  • The euro was at $1.0027, down 0.1%

  • The Japanese yen was at 137.24 to the dollar, down 0.2%

  • The offshore yuan was at 6.8440 to the dollar, down 0.1%

titles

goods

  • West Texas Intermediate crude is down 1.2% to $89.70 a barrel

  • Gold was at $1,745.26 an ounce, down 0.1%

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