Stock Futures Rally With Gold on Rate Cut Hopes: Markets Wrap

(Bloomberg) — US stocks futures gained and gold soared to an all-time high as last week’s slowing inflation data reinforced hopes that the Federal Reserve will cut interest rates this year.

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S&P 500 contracts added 0.3%, while markets in Europe, Australia and Hong Kong were shut for the Easter holiday. Gold topped $2,265 ounce and an index of the dollar inched lower. Bitcoin slipped below $70,000.

A cooldown in the Fed’s preferred gauge of underlying inflation last month, coupled with a rebound in household spending, suggests that the bullish narrative that propelled stocks to records this year remains intact. The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, rose 0.3% from the prior month, slowing from January’s surprisingly strong reading.

“You have a Fed that at the moment is highly data dependent,” said Matthew Luzzetti, chief US economist at Deutsche Bank. “Until we get either confirmation or a different view on what the data are going to be, it’s kind of hard to gauge exactly where we end up from a Fed policy perspective.”

At an event on Friday, Fed Chair Jerome Powell repeated that the US central bank isn’t in any rush to cut interest rates as policymakers await more evidence that inflation is contained.

Meanwhile, AT&T Inc. shares fell 2% in premarket trading. The company said over the weekend that the personal data from current account holders and former customers was leaked onto the dark web.

Read More: Bullish Stocks Narrative Seen Intact After US Inflation Data

In Asian markets, Japanese equities fell after a report showed confidence among the country’s large manufacturers weakened slightly.

Story continues

Chinese stocks rallied as a rebound in manufacturing activity boosted hopes that the economic recovery may be starting to gain traction. The benchmark CSI 300 Index rose 1.6% to lead gains in Asia. “Emerging optimism about China is real,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank in Singapore.

Key events this week:

• US construction spending, ISM Manufacturing, Monday

• Bank of Canada issues business outlook and survey of consumer expectations, Monday

• Eurozone S&P Global Manufacturing PMI, Tuesday

• France S&P Global Manufacturing PMI, Tuesday

• Germany S&P Global / BME Manufacturing PMI, CPI, Tuesday

• India HSBC/S&P Global Manufacturing PMI, Tuesday

• Mexico international reserves, Tuesday

• South Korea CPI, Tuesday

• Spain unemployment, Tuesday

• UK S&P Global / CIPS Manufacturing PMI, Tuesday

• US factory orders, light vehicle sales, JOLTS job openings, Tuesday

• Brazil industrial production, Wednesday

• Eurozone CPI, unemployment, Wednesday

• Hong Kong retail sales, Wednesday

• US ISM Services, Wednesday

• Eurozone S&P Global Services PMI, PPI, Thursday

• India services PMI, Thursday

• US initial jobless claims, trade, Thursday

• Eurozone retail sales, Friday

• France industrial production, Friday

• Germany factory orders, Friday

• Hong Kong PMI, Friday

• India rate decision, Friday

• Japan household spending, Friday

• Philippines CPI, Friday

• Russia GDP, Friday

• Singapore retail sales, Friday

• South Korea current account balance, Friday

• US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.3% as of 7:35 a.m. New York time

• Nasdaq 100 futures rose 0.4%

• Futures on the Dow Jones Industrial Average rose 0.3%

• The MSCI World index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0788

• The British pound was little changed at $1.2616

• The Japanese yen was little changed at 151.38 per dollar

Cryptocurrencies

• Bitcoin fell 1.9% to $69,523.1

• Ether fell 2.5% to $3,542.61

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.21%

• Germany’s 10-year yield was little changed at 2.30%

• Britain’s 10-year yield was little changed at 3.93%

Commodities

• West Texas Intermediate crude was little changed

• Spot gold rose 0.9% to $2,250.14 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Cheng and Aya Wagatsuma.

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