US Stock Futures Drop as High Yields Sour Mood: Markets Wrap

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US Stock Futures Drop as High Yields Sour Mood: Markets Wrap

(Bloomberg) — US stocks were poised to extend their retreat as Treasury yields near the highest level this year fanned concern about restrictive monetary policy.

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Futures for the S&P 500 fell 0.4%, pointing to a second day of declines. Salesforce Inc. tumbled 17% in premarket trading on slowing sales growth. Europe’s Stoxx 600 benchmark was led higher by telecom and banking stocks. Ten-year Treasury yields steadied after jumping about 15 basis points in the past two days.

Remaining data this week could prove key as investors refine their monetary policy

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: The US posts ****** domestic product numbers later Thursday, which will likely be lower from an initial print, and inflation reports from the US and Europe are coming Friday.

Global equities are headed for their worst week since mid-April as US rate-cut expectations dwindle and tepid US auctions stir worries about funding the US deficit.

BlackRock International Ltd. is sticking to the front end and the belly of the US Treasuries curve as optimism over US easing fades, according to Karim Chedid, the firm’s investment strategy head for EMEA.

“We see that as the area where you’re still getting the most bang for buck in terms of income for stability,” he said in an interview with Bloomberg Television.

While the scorching rally in tech companies is underpinned by fundamentals and ******** one of BlackRock’s “key sector overweights,” Chedid says he’s seeing growing inflows into ********* and ********* equities.

The prospect of a rate cut from the ********* Central Bank at its June meeting is helping, as is “a bottoming out in the macro data in Europe, which investors are liking,” Chedid said. “Earnings have seen a significant upgrade in Europe over the past 12 months.”

Rand Slides

Elsewhere, the rand extended losses and banking stocks fell as South *******’s election vote count gathers pace. The ruling party looks set to fall well short of obtaining a parliamentary majority for the first time since it came to power.

South *******’s ANC May Lose National Majority, Model Shows

In commodities, crude slipped as traders look to US stockpile data and an OPEC+ meeting on the weekend for more clarity on the supply and demand

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.

Corporate Highlights:

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• Goldman Sachs analysts initiated coverage of six large-cap pharmaceutical stocks on Thursday. They gave buy ratings to AstraZeneca Plc, Novo Nordisk A/S and Novartis AG, and are neutral on GSK Plc and Bayer AG. Roche Holding AG is their sole sell rating.

• China is poised to impose a record fine on PricewaterhouseCoopers LLP and suspend some of the global auditor’s local operations over its role in one of the nation’s biggest alleged financial ****** cases, according to people familiar with the matter.

• Luxury sneaker brand Golden Goose Group SpA is kicking off a Milan initial public offering that is poised to be Italy’s largest listing in over a year.

• Saudi Arabia is preparing to formally launch a secondary offering of shares in oil giant Aramco as soon as Sunday, a deal that could raise more than $10 billion and rank among the largest of its kind in recent years.

• Brookfield is in exclusive talks to acquire a majority stake in Neoen SA in a deal valuing the French renewable energy developer at about €6.1 billion.

Key events this week:

• US initial jobless claims, GDP, Thursday

• Fed’s John Williams and Lorie Logan speak, Thursday

• Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday

• China official manufacturing and non-manufacturing PMI, Friday

• Eurozone CPI, Friday

• US consumer income, spending, PCE deflator, Friday

• Fed’s Raphael Bostic speak, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.4% as of 7:15 a.m. New York time

• Nasdaq 100 futures fell 0.3%

• Futures on the Dow Jones Industrial Average fell 0.9%

• The Stoxx Europe 600 rose 0.3%

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.0815

• The British pound rose 0.1% to $1.2715

• The ********* yen rose 0.5% to 156.88 per dollar

Cryptocurrencies

• Bitcoin rose 0.7% to $67,912.57

• Ether was little changed at $3,746.59

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.59%

• Germany’s 10-year yield declined one basis point to 2.68%

• Britain’s 10-year yield declined two basis points to 4.38%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Masaki Kondo and Chiranjivi Chakraborty.

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