(Bloomberg) — US stock futures made small gains while a gauge of dollar strength fell fractionally in cautious trading early Monday amid growing concern over the risk of recession.
Most Read from Bloomberg
Contracts for the S&P 500 and the Nasdaq 100 rose about 0.4% after both benchmarks posted small gains on Friday. Australian shares opened marginally higher while futures for other Asian markets pointed to mixed sentiment.
Traders are in for another bumpy week, with the banking crisis casting a shadow over markets. On top of that, multiple Federal Reserve officials will speak, a key measure of US inflation is due and there are renewed geopolitical tensions with Russia to station tactical nuclear weapons in Belarus. Fed Minneapolis President Neel Kashkari said over the weekend that bank turmoil had increased the risk of a US recession.
Authorities are said to be considering expanding an emergency lending facility for US banks in ways that would give First Republic Bank more time to shore up its balance sheet. Yet investors in the bond market already see the wider damage in the sector running its course. They’re piling into wagers that a recession is around the corner and bets on any further interest rate hikes this year are being axed while expectations for rate cuts ramp up.
Bond yields in Australia and New Zealand fell slightly early Monday after the benchmark 10-year Treasury yield declined five basis points on Friday. In the stock market Friday, after a slide that reached 1% in the first hour of trading, the S&P 500 snapped back and notched its second straight week of gains. A gauge of US financial heavyweights climbed from its lowest level since November 2020.
“The recent banking crisis has heightened fears of a recession,” Ed Yardeni, president and chief investment strategist of his eponymous research firm, said in a Monday note. Still, Yardeni has not increased the odds of recession despite the pressure facing lenders and places a 60% probability of a soft landing. “We’re not convinced it will lead to a credit crunch that triggers a recession.”
Top US regulators said after a meeting Friday that while some banks are coming under stress, the overall financial system is still sound.
Global authorities continued trying to instill calm in financial markets following the recent failure of some US regional lenders and the near-collapse of banking giant Credit Suisse Group AG before its government-brokered takeover by rival UBS Group AG. European Central Bank President Christine Lagarde told European Union leaders that the region’s banking sector is strong, according to people familiar with the matter.
Key events this week:
China industrial profits, Monday
US wholesale inventories, US Conf. Board consumer confidence, Tuesday
EIA Crude Oil Inventory Report, Wednesday
Eurozone economic confidence, consumer confidence, Thursday
US GDP, initial jobless claims, Thursday
Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin speaks at event. Treasury Secretary Janet Yellen also speaks, Thursday
China PMI, Friday
Eurozone CPI, unemployment, Friday
US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
ECB President Christine Lagarde speaks, Friday
New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 8:12 a.m. Tokyo time. The S&P 500 rose 0.6% on Friday
Nasdaq 100 futures rose 0.3%. The Nasdaq 100 rose 0.3% Friday
Nikkei 225 futures were little changed
Australia’s S&P/ASX 200 Index rose 0.3%
Hang Seng Index futures fell 0.2%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.1% to $1.0775
The Japanese yen was little changed at 130.78 per dollar
The offshore yuan was little changed at 6.8702 per dollar
The Australian dollar was little changed at $0.6650
Cryptocurrencies
Bitcoin rose 1.1% to $28,101.88
Ether rose 1% to $1,779.99
Bonds
Commodities
West Texas Intermediate crude rose 0.5% to $69.63 a barrel
Spot gold fell 0.2% to $1,975.02 an ounce
This story was produced with the assistance of Bloomberg Automation.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
Source: https://finance.yahoo.com/news/us-stock-futures-edge-higher-222306721.html