(Bloomberg) — Stock markets stumbled on the last day of the month on concern the Federal Reserve may stick to its hawkish messaging at its meeting on Wednesday.
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S&P 500 futures pointed to a lower open on Wall Street and Europe’s benchmark Stoxx 600 retreated 0.4%. Car makers Volkswagen AG, Mercedes-Benz Group AG and Stellantis NV fell, offsetting better-than-expected European economic data. The Bloomberg Dollar Spot Index climbed and 10-year Treasury yields were steady at 4.62%.
Equities are on the cusp of closing out the first monthly retreat of 2024, with the S&P 500 down 2.6% in April. Amazon.com Inc., McDonald’s Corp and Coca-Cola Co. are due to report later today. Fed Chair Jerome Powell is likely to bolster expectations interest rates will stay higher for longer after Wednesday’s rates announcement, according to Bloomberg Economics.
“Sentiment is positive but reserved,” said Peter Rosenstreich, head of investment products at Swissquote. “There has been plenty of hype around rates, earnings and the macro environment — now markets want to see the results.”
In corporate news, HSBC Holdings Plc climbed more than 3% after solid earnings and the surprise departure of Group Chief Executive Officer Noel Quinn, which some analysts said could pave the way for the next stage in the bank’s growth plans.
Elsewhere, oil held its biggest drop in almost two weeks amid discussions on a possible cease-fire in the Middle East.
Momentum Bounce?
Regardless of market direction, momentum traders are modeled to buy equities over the next week, according to Goldman Sachs Group Inc.’s trading desk.
Commodity trading advisers — funds that use systematic strategies to trade futures contracts — are exposed to about $106 billion in long positions after the drawdown in April, Cullen Morgan, an equity derivatives and flows specialist at the bank, wrote in a note. That’s set to support a bounce in global equities after a rough month.
Corporate Highlights:
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Volkswagen AG’s first-quarter earnings fell after waning car sales and the cost of introducing new models weighed on profitability.
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Mercedes-Benz Group AG’s earnings plummeted 34% in the first quarter, weighed down by model changes and sluggish demand for electric vehicles.
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Samsung Electronics Co. rose 1% in Seoul trading after its semiconductor business returned to profitability for the first time since 2022.
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Elon Musk is planning hundreds more job cuts across Tesla Inc. as two more senior executives leave the company, according to the Information.
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Deutsche Lufthansa AG said it will initiate a cost-cutting drive at the namesake airline business that includes freezing projects and review hiring in some areas
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Adidas AG reported increased profitability in the first quarter, boosted by demand for sneakers like the Samba and inventories that are coming down to healthier levels.
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Stellantis NV’s first-quarter sales slumped 12%, led by declines in the US where the changeover to the revamped Ram 1500 cut into sales with the carmaker forecasting new models to drive growth later in the year.
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Carlsberg A/S said it would start a new quarterly share buyback program after first quarter sales and beer volumes grew, boosted by its performance in Asia.
Key events this week:
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US employment cost index, Conf. Board consumer confidence, Tuesday
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Amazon, Samsung, HSBC earnings, Tuesday
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Labour Day holiday across much of Europe, Wednesday
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Treasury’s quarterly refunding announcement, Wednesday
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US ADP employment change, JOLTS job openings, ISM Manufacturing, Wednesday
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Federal Reserve rate decision, Wednesday
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Eurozone S&P Global Manufacturing PMI, Thursday
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US factory orders, initial jobless claims, trade, Thursday
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Apple earnings, Thursday
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Eurozone unemployment, Friday
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US unemployment, nonfarm payrolls, ISM Services, Friday
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Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.2% as of 5:55 a.m. New York time
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Nasdaq 100 futures fell 0.2%
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Futures on the Dow Jones Industrial Average were little changed
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The Stoxx Europe 600 fell 0.4%
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The MSCI World index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro was little changed at $1.0727
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The British pound fell 0.1% to $1.2547
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The Japanese yen fell 0.4% to 156.91 per dollar
Cryptocurrencies
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Bitcoin fell 1.9% to $61,765.6
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Ether fell 3.9% to $3,052.11
Bonds
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The yield on 10-year Treasuries advanced one basis point to 4.63%
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Germany’s 10-year yield advanced two basis points to 2.55%
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Britain’s 10-year yield advanced two basis points to 4.31%
Commodities
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West Texas Intermediate crude rose 0.2% to $82.82 a barrel
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Spot gold fell 0.9% to $2,315.24 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu and Aya Wagatsuma.
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