(Bloomberg) — U.S. stock futures pointed higher toward Wall Street as investors look to avoid rising borrowing costs that dampened market sentiment earlier this week.
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S&P 500 contracts rose 0.3%, suggesting the underlying index could narrow its first weekly decline in seven weeks. U.S. Treasury yields fell for the second day in a row, with the 10-year Treasury rate up about a tenth of a percentage point for the week.
Traders are focused on next week’s release of U.S. economic data, including the monthly jobs report, for new clues about the extent of the Federal Reserve’s interest rate cuts. As the Nov. 5 presidential vote approaches, some analysts predict a victory for Donald Trump will boost the stock market, while others say it could reignite inflation and slow the Fed’s pace of easing. Some analysts are warning.
“The market is at least sniffing out a Republican landslide victory, and perhaps an electoral and Senate victory,” Stephen Orth, chief investment officer for equities at Federated Hermes, said in a note. “If this were to happen, and we think it is very likely, we would expect the modest uptick we have been experiencing since July to gain momentum. Economy financials, industrials, energy stocks, and small-cap stocks are likely to benefit.”
Bank of America strategists led by Michael Hartnett also highlighted other pre-election deals. Investors continue to add to gold as a hedge against inflation and populism, but other popular themes such as selling bonds and buying artificial intelligence stocks are holding up, they said.
BofA’s Hartnett says bets on gold are rising ahead of US presidential election
Precious metal prices hit a record high on Wednesday, marking the biggest weekly inflows into gold funds since July 2020, BofA strategists said. This week, the yield on the US 10-year Treasury bond briefly exceeded 4.2%, the highest level since July, and the stock price of US semiconductor company Nvidia hit a record high.
Meanwhile, Europe’s Stoxx 600 index fell on Friday after lackluster results from companies such as French cognac maker Remy Cointreau and Mercedes-Benz Group AG. Regional stock indexes are expected to fall by more than 1% this week.
“The situation is volatile,” said Vidya Anant, senior portfolio manager and head of sustainable equity funds Europe at DWS Asset Management. “We’re seeing a bit of a risk-off movement. Especially at this point right before the election, no one’s willing to move into equities.”
story continues
Company highlights:
Rémy Cointreau has lowered its annual sales outlook due to weak demand in the United States and China, where consumers continue to cut back on spending.
Despite third-quarter profits beating analysts’ expectations, ENI lowered its full-year profit forecast to reflect the worsening outlook for oil prices.
South Korean prosecutors have indicted BNP Paribas on suspicion of violating short-selling rules, according to a person with direct knowledge of the matter.
Electrolux reported third-quarter operating profit that was below analysts’ average expectations.
NatWest Group has raised its outlook for this year after third-quarter profits beat expectations.
Mercedes-Benz plans to step up cost-cutting measures after increased competition and weak demand in China hit the luxury car maker’s profits.
Thames Water Utilities announced on Friday a proposal to raise up to 3 billion pounds ($3.9 billion) from creditors to buy time to avoid going into special administration early next year.
In Asia, the yen is trading in a range against the dollar ahead of weekend general elections, which could see Japan’s ruling party lose its majority in the lower house for the first time since 2009. Such an outcome would cause the yen and Japanese stocks to fall. say the strategists.
The People’s Bank of China has kept its one-year policy rate unchanged after cutting funding costs to record levels a month ago, as authorities carefully adjust the pace of monetary stimulus to support the economy. suggests.
China’s stimulus measures are insufficient to curb deflation risks, IMF says
Oil prices resumed rising after two days of declines, with traders continuing to focus on geopolitical developments and the supply outlook in the Middle East.
This week’s main events:
The main movements in the market are:
stock
As of 7:22 a.m. New York time, S&P 500 futures were up 0.2%.
Nasdaq 100 futures rose 0.2%
Dow Jones Industrial Average futures rose 0.2%.
Stoxx European 600 drops 0.2%
MSCI World Index little changed
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0824.
The British pound was almost unchanged at $1.2984.
The Japanese yen was almost unchanged at 151.91 to the dollar.
cryptocurrency
Bitcoin fell 0.3% to $67,924.66.
Ether rose 0.1% to $2,538.63
bond
The 10-year Treasury yield fell 2 basis points to 4.20%.
Germany’s 10-year bond yield rose 1 basis point to 2.28%.
UK 10-year bond yields fell 1 basis point to 4.22%.
merchandise
West Texas Intermediate crude rose 0.7% to $70.70 a barrel.
Spot gold fell 0.5% to $2,722.94 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from David Finnerty, Catherine Bosley, and Richard Henderson.
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