US futures slide on Covid fears in China;  Earnings in Dollars: Market Recap

US futures slide on Covid fears in China; Earnings in Dollars: Market Recap

(Bloomberg) – U.S. stock futures fell as China may tighten Covid restrictions after a string of reported deaths as investors seek refuge in the dollar.

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The S&P 500 and Nasdaq 100 contracts both fell at least 0.3%. Chinese stocks fell in U.S. premarket trading as traders weighed whether China’s reopening could face setbacks. Walt Disney Co. defied risk sentiment, rallying after the company was surprised by bringing back former executive Bob Iger as chief executive. European equities pared their losses.

The dollar appreciated against its Group of 10 peers and emerging market currencies. Treasuries rose. Oil sank on fears of a weakening demand outlook from China.

China experienced its first Covid-related death in nearly six months on Saturday and two more were reported on Sunday. Worsening outbreaks across the country are raising fears authorities may again resort to harsh restrictions. A city near Beijing rumored to be a test case for ending virus restrictions has suspended schools, closed universities and asked residents to stay home for five days.

“Not only would further lockdowns in major cities stunt growth through the end of the year, but it could also complicate any plans that are in place to ease the zero-Covid policy next year,” he said. said Craig Erlam, senior market analyst. in Oanda. “We are back in uncertain territory which could slow the stock market recovery.”

Regarding the outlook for equities, strategists at Goldman Sachs Group Inc. said investors hoping for a better year in 2023 would be disappointed as the bear market phase is not yet over.

“The conditions that are generally consistent with an equity bottom have not yet been reached,” strategists including Peter Oppenheimer and Sharon Bell wrote in a note on Monday. They said a spike in interest rates and lower valuations reflecting the recession are needed before a sustained stock market rally can occur.

This week, traders will also look to the minutes from the Federal Reserve’s latest policy meeting for more clues on the course of rate hikes.

Atlanta Fed President Raphael Bostic said he favors a slower pace of interest rate hikes, with no more than a full percentage point of additional hikes, to try to secure a soft landing of the economy. Boston Fed President Susan Collins reiterated her view that options are open for the size of December’s interest rate hike, including the possibility of a 75 bp move. base.

Elsewhere, cryptocurrency prices have struggled in the current crisis triggered by the fall of Sam Bankman-Fried’s once mighty FTX empire. Crypto-exposed stocks fell.

Key events this week:

  • Chicago Fed National Activity Index in the United States, Monday

  • Richmond Fed U.S. Manufacturing Index, Tuesday

  • The OECD publishes its Economic Outlook on Tuesday

  • The Fed’s Loretta Mester and James Bullard speak, Tuesday

  • S&P Global PMIs: US, Eurozone, UK, Wednesday

  • U.S. MBA Mortgage Applications, Durable Goods, Initial Jobless Claims, University of Michigan Sentiment, New Home Sales, Wednesday

  • Minutes of the Federal Reserve’s Nov. 1-2 meeting, Wednesday

  • The ECB publishes the minutes of its October policy meeting on Thursday

  • US stock and bond markets are closed for the Thanksgiving holiday, Thursday

  • U.S. stock and bond markets close early on Friday

Some of the major movements in the markets:


  • S&P 500 futures fell 0.4% at 8:57 a.m. PT

  • Nasdaq 100 futures fell 0.5%

  • Dow Jones Industrial Average futures are little changed

  • The Stoxx Europe 600 has changed little

  • The MSCI World index fell 0.4%


  • The Bloomberg Dollar Spot Index rose 0.6%

  • The euro fell 0.7% to $1.0254

  • The British pound fell 0.7% to $1.1809

  • The Japanese yen fell 0.9% to 141.61 per dollar


  • Bitcoin fell 0.7% to $16,138.64

  • Ether fell 0.7% to $1,133.17


  • The yield on 10-year Treasury bills fell three basis points to 3.80%

  • Germany’s 10-year yield fell two basis points to 2.00%

  • The UK 10-year yield fell two basis points to 3.22%


  • West Texas Intermediate crude fell 0.7% to $79.50 a barrel

  • Gold futures fell 0.6% to $1,758.80 an ounce

This story was produced with assistance from Bloomberg Automation.

–With the help of Tassia Sipahutar and Robert Brand.

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