(Bloomberg) — US equity futures signaled a partial rebound on Wall Street as investors reset expectations on the timing of Federal Reserve interest-rate cuts and assessed a deluge of earnings.
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S&P 500 contracts gained 0.3% following a slump on Wednesday that was the steepest for the index in four months. New York Community Bancorp was 3.9% higher in premarket trading following its record plunge. Concerns over office market loans reverberated as far as Tokyo, where Aozora Bank Ltd. fell 21% on losses tied to US commercial property.
Europe’s Stoxx 600 index fluctuated on a crowded day in the reporting calendar. Adidas AG slumped on lower-than-expected profit guidance. Deutsche Bank AG rallied after announcing a share buyback and higher revenue goal.
US megacap earnings are back in focus, with Apple Inc., Amazon.com Inc. and Meta Platforms Inc. all due to release results.
Chair Jerome Powell said after Wednesday’s decision he doesn’t think it’s likely the Fed will cut in March. In a sign that officials are not in a hurry to lower rates, the central bank also said it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.” A Bank of England rates announcement is also due shortly.
“The market got ahead of itself in the last few months and it feels like we will get a respite as rate decreases start to get priced out and we see more rhetoric from central banks pushing back on rate cuts,” said Justin Onuekwusi, chief investment officer at wealth manager St James Place Management Svs Ltd. “I think we will see similar rhetoric from the BOE in that there are too many rate decreases priced in.”
The BOE is expected to leave its key lending rate at a 16-year high later Thursday, while delivering a brighter outlook for the UK economy, reducing its forecast for inflation this year and potentially opening the way to policy easing.
Sweden’s Riksbank held rates steady and said it may lower borrowing costs as soon as the first half of the year, pivoting from a tightening campaign. The Swedish krona fell after the decision.
Treasuries pared some of Wednesday’s gains, which followed Powell’s comments and the fresh concerns about regional lenders. A gauge of dollar strength was steady, with the yen the only gainer against the greenback among its Group-of-10 peers.
Oil rebounded after the biggest decline in three weeks on Wednesday as investors weighed the risks from any US retaliation to a deadly attack in Jordan against signs of robust American supply.
Corporate Highlights
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Deutsche Bank AG plans to cut 3,500 jobs over the coming years as Chief Executive Officer Christian Sewing seeks to make good on a pledge to lift profitability and return more money to shareholders.
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Shell Plc maintained the pace of its share buybacks after a strong performance from its gas traders offset the impact of lower commodity prices in the fourth quarter.
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Glencore Plc is cutting its production target for cobalt this year in response to weak market conditions, which prompted the miner to stockpile metal that’s proving tough to sell.
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ING Groep NV warned its key revenue source will weaken as it passes on higher rates to depositors.
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BNP Paribas SA lowered performance targets for 2025 citing factors including the European Central Bank’s end to payments on reserves, and booked a slump in fourth-quarter profit driven partly by legal provisions.
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Julius Baer Group Ltd. said it would exit its private debt business after writing down all of its loans to the bankrupt Signa companies, and confirmed that Chief Executive Officer Philipp Rickenbacher is stepping down as a result of the matter.
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Roche Holding AG forecast a sluggish recovery in sales and earnings this year as it emerges from a difficult 2023 and a string of research setbacks.
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BT Group Plc earnings rose in the third fiscal quarter, in line with expectations, offering momentum to incoming Chief Executive Officer Allison Kirkby as she seeks to establish stable growth after years of turmoil.
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Adidas AG said its profit this year will be hit by unfavorable currency movements, but it plans to mitigate some of the damage by continuing to sell left-over inventory from its defunct Yeezy partnership with the rapper Ye.
Key events this week include:
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Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday
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US productivity, construction spending, ISM Manufacturing, initial jobless claims, Thursday
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Apple, Amazon, Meta earnings, Thursday
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Bank of England interest rate decision, Thursday
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US employment report, University of Michigan consumer sentiment, factory orders, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.3% as of 5:45 a.m. New York time
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Nasdaq 100 futures rose 0.5%
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Futures on the Dow Jones Industrial Average were little changed
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The Stoxx Europe 600 fell 0.2%
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The MSCI World index fell 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.2% to $1.0798
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The British pound fell 0.4% to $1.2638
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The Japanese yen was little changed at 146.80 per dollar
Cryptocurrencies
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Bitcoin fell 0.7% to $42,165.01
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Ether fell 0.5% to $2,266.34
Bonds
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The yield on 10-year Treasuries advanced four basis points to 3.95%
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Germany’s 10-year yield advanced five basis points to 2.22%
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Britain’s 10-year yield advanced one basis point to 3.81%
Commodities
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West Texas Intermediate crude rose 1% to $76.64 a barrel
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Spot gold fell 0.2% to $2,035.31 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Pearl Liu.
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