Stocks, Futures Mixed as Bond Yields March Higher: Markets Wrap

(Bloomberg) — Stocks were mixed Monday as traders weighed a global advance in sovereign bond yields and corporate developments.

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Europe’s Stoxx 600 Index rose, while U.S. futures fluctuated and Asian shares fell. A dollar gauge was little changed and oil slipped. U.S. stock and bond markets are shut Monday for a holiday.

Bond yields rose around the world after U.S. Treasuries tumbled Friday on concerns about more hawkish Federal Reserve policy to fight inflation. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Friday the central bank could raise rates as many as seven times, while billionaire investor Bill Ackman argued for a bigger-than-expected 50 basis point move in March to “restore its credibility.”

The advance of the omicron virus strain, the start of the earnings season and a boom in mergers and acquisitions are also coloring sentiment. Investors are looking for signs that corporate profits can help arrest a retreat in global equities led in part by a slide in U.S. technology shares.

“Given the record inflation backdrop and historically tight labor market, investor focus is on margins — demonstrating pricing power, passing on rising costs to the customer,” Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, wrote in a note.

Among individual movers on Monday, Unilever Plc shares fell more than 7%, while GlaxoSmithKline Plc rose, as the consumer-products company considers making a higher offer for Glaxo’s consumer unit. Equipment maker BE Semiconductor rose to the highest since the stock’s 1995 listing after Oddo and Deutsche Bank boosted their price targets.

In corporate developments, Credit Suisse Group AG’s Chairman Antonio Horta-Osorio was ousted for breaching Covid quarantine rules, throwing the Swiss financial giant into fresh turmoil as it struggles to emerge from a series of scandals.

Meanwhile, China’s central bank eased policy on Monday to counter an economic slowdown. A real-estate slump and partial Covid shutdowns are among the challenges for the world’s second-largest economy. The move contrasts with the shift toward tighter monetary policy in the U.S. and elsewhere to contain price pressures.

“The PBOC really has started the New Year in a different position to, let’s say, other global banks and we do expect to see further easing or supportive measures, both monetary-wise as well as from a fiscal stance,” Catherine Yeung, investment director at Fidelity International, said on Bloomberg Television.

For more market analysis, read our MLIV blog.

What to watch this week:

Goldman Sachs, Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among companies publishing earnings during the week
U.S. data includes Empire manufacturing Tuesday, housing starts Wednesday and jobless claims Thursday
Bank of Japan monetary policy decision, Tuesday
Interest-rate decisions due from nations including Indonesia, Malaysia, Norway, Turkey and Ukraine, Thursday
EIA crude oil inventory report, Thursday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.5% as of 10:40 a.m. London time
Futures on the Nasdaq 100 were little changed
Futures on the Dow Jones Industrial Average rose 0.2%
The MSCI Asia Pacific Index fell 0.8%
The MSCI Emerging Markets Index fell 0.5%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1416
The Japanese yen fell 0.2% to 114.46 per dollar
The offshore yuan was little changed at 6.3530 per dollar
The British pound was little changed at $1.3679

Bonds

Commodities

Brent crude fell 0.1% to $85.96 a barrel
Spot gold rose 0.1% to $1,819.92 an ounce