Global stocks slip after setback in Wall Street rally: Markets wrap

(Bloomberg) — Global stocks fell on Monday after Wall Street’s powerful second-quarter rally lost steam late last week.

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Chemicals and construction companies declined in Europe, while telecom stocks outperformed. Among the biggest individual movers, Sartorius AG fell 15% after issuing a bigger-than-expected profit warning. In Asia, disappointed hopes for further stimulus dragged down Chinese tech firms.

Wall Street’s rally has erased more than a year of Fed-induced losses, shaking off the impact of stocks, volatility and $10 rate hikes. But with the path of rates increasingly uncertain, traders oscillate between the appeal of the rally and the market overbought as it runs out.

Despite pressure from last weekend’s $4.2 trillion in options, the S&P 500 index continued its fifth straight week of gains and is now higher than the day the Federal Reserve began its campaign.

At its latest meeting last week, the central bank kept interest rates unchanged but warned of further tightening. In the past, pausing rate hikes for three months after such rate hikes has boosted stock prices.

US stock and bond markets are closed for the holiday on Monday.

Also Read: Wall Street rally erases Fed-induced losses in year

Meanwhile, Chinese tech companies Alibaba Group Holding Ltd, JD.com Inc. and Baidu Inc. All fell more than 3%, dragging the Hang Seng Tech index up 2.9%.

Reports covering China’s State Council meeting on Friday, chaired by Premier Li Keqiang, were light on details about any possible trigger or timing. The lack of tangible sources of support, as the economy slows, worries investors who bid up Chinese stocks last week hoping for a big package.

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Commodity prices also showed signs of weakness as Brent and West Texas Intermediate fell around 1%. Gold was broadly flat.

Federal Reserve Chairman Jerome Powell will deliver his semi-annual report to Congress on Wednesday. Federal Reserve Bank President James Bullard of St. Louis and his counterparts in New York and Chicago are all scheduled to speak in the coming week.

Highlights of this week:

  • American Juneteenth holiday, Monday

  • China Debt Prime Rates, Tuesday

  • US housing starts, Tuesday

  • St. Louis Federal Reserve Bank President James Bullard speaks Tuesday

  • New York Fed President John Williams speaks on Tuesday

  • Federal Reserve Chairman Jerome Powell delivered semiannual congressional testimony before the House Financial Services Committee on Wednesday.

  • Federal Reserve Bank of Chicago President Austin Goolsbee speaks Wednesday

  • Eurozone consumer confidence, Thursday

  • Rate results in UK, Switzerland, Indonesia, Norway, Mexico, Philippines, Turkey, Thursday

  • US Conference Board Leading Index, Initial Jobless Claims, Current Account, Existing Home Sales, Thursday

  • Federal Reserve Chairman Jerome Powell gave his semiannual testimony to Congress before the Senate Banking Committee on Thursday.

  • Cleveland Fed’s Loretta Meister speaks Thursday

  • Eurozone S&P Global Eurozone Manufacturing PMI, S&P Global Eurozone Services PMI, Friday

  • Japan CBI, Friday

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

  • US S&P Global Manufacturing PMI, Friday

  • St. Louis Federal Reserve Bank President James Bullard speaks Friday

Some key movements in the markets:

Shares

  • The Stoxx Europe 600 was down 0.5% as of 8:44 a.m. London time.

  • S&P 500 futures rose 0.1%

  • Nasdaq 100 futures rose 0.2%

  • The future of the Dow Jones Industrial Average was little changed

  • The MSCI Asia Pacific index fell 0.6%

  • The MSCI emerging market index fell 0.7%

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Coins

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0934

  • The Japanese yen was little changed at 141.90 per dollar

  • The offshore yuan fell 0.4% to 7.1579 per dollar

  • The British pound was little changed at $1.2827

Cryptocurrencies

  • Bitcoin fell 0.2% to $26,427.29

  • Ether fell 0.3% to $1,725.1

Bonds

  • The yield on 10-year Treasuries was little changed at 3.76%.

  • Germany’s 10-year yield was little changed at 2.47%

  • Britain’s 10-year yield rose two basis points to 4.43%

materials

  • Brent crude fell 0.7% to $76.06 a barrel

  • Spot gold was down 0.2% at $1,953.65 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Sakharika Jaisingani, Denitsa Sekova and Richard Henderson.

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