Stocks Mixed After Fed With Apple Results In Focus: Markets Wrap

Article content

(Bloomberg) — Stocks traded mixed and Treasury yields ticked lower after Federal Reserve Chair Jerome Powell downplayed the prospect of further interest-rate hikes. The yen resumed losses after a sudden jump hinted at intervention.

Europe’s Stoxx 600 fell 0.3% as Novo Nordisk A/S dropped on disappointing results and Moller-Maersk A/S, a bellwether for global trade, retreated 4%. Shell Plc advanced after the energy producer posted a profit beat and announced a $3.5 billion share buyback. US futures climbed. 

Article content

Article content

Bloomberg’s dollar index fell for a second day, reflecting the fall in U.S. yields following the Fed’s decision. With that out of the way, traders are looking to other catalysts, such as euro area manufacturing data and Apple Inc.’s quarterly results later on Thursday.

The Fed played down the possibility of impending rate hikes as officials unanimously decided to keep the target range for the federal funds rate at 5.25% to 5.5% after a series of data suggested persistent inflation pressures. Powell said the central bank’s next move was unlikely to be to raise interest rates and said authorities would need to provide compelling evidence that policy was not tight enough to bring inflation back toward 2 percent. to achieve the goal.

“The bar for a hawkish surprise was set high last night” and the Fed “did not try to cross it,” said Kyle Rodda, senior market analyst at Capital.com in Melbourne.

Further insight into the health of the U.S. economy will be provided in April’s nonfarm payrolls data due on Friday. A model from Bloomberg Economics suggests the unemployment rate remains unchanged at 3.8%. That suggests that “hiring likely remains too hot for the Fed,” economists Andrej Sokol and Scott Johnson wrote in a note.

Article content

Article content

Apple’s numbers, to be released after the U.S. market closes, will give investors a better sense of how the iPhone maker is weathering a sales decline driven in part by a sluggish Chinese market.

“Earnings appear to be quite stable and quite constructive on the equity side,” John Woods, CIO for Asia Pacific at Lombard Odier, said in an interview with Bloomberg Television. “Right now it’s predominantly a US story.”

Yen slide

The yen fell as much as 1.1% against the dollar after rising sharply in New York late Wednesday. The fresh decline suggests investors are skeptical that Japanese authorities can prevent a weakening of the currency given the country’s wide interest rate differential with the United States. Japan’s top monetary official, Masato Kanda, said he had nothing to say when asked whether officials had intervened.

In commodities, oil recovered its losses from Wednesday and gold gained.

Important events this week:

• Eurozone S&P Global Manufacturing PMI, Thursday
• U.S. factory orders, initial jobless claims, trading, Thursday
• Apple earnings, Thursday
• Unemployment in the Eurozone, Friday
• US Unemployment, Non-Farm Payrolls, ISM Services, Friday
• Chicago Fed President Austan Goolsbee speaks Friday

Article content

Some of the key moves in the markets:

Shares

• The Stoxx Europe 600 fell 0.2% at 8:32 a.m. London time
• S&P 500 futures rose 0.5%
• Nasdaq 100 futures rose 0.7%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The MSCI Asia Pacific index rose 0.9%
• The MSCI Emerging Markets Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.5%
• The euro was little changed at $1.0721
• The Japanese yen fell 0.5% to 155.34 per dollar
• The offshore yuan rose 0.1% to 7.2256 per dollar
• The British pound was little changed at $1.2534

Cryptocurrencies

• Bitcoin rose 0.7% to $57,723.17
• Ether fell 0.3% to $2,928.85

Tie up

• The 10-year Treasury yield fell two basis points to 4.61%
• The yield on 10-year German government bonds fell three basis points to 2.55%
• The 10-year UK government bond yield fell four basis points to 4.32%

raw materials

• Brent crude rose 0.7% to $84.06 a barrel
• Spot gold fell 0.4% to $2,311.37 an ounce

This story was produced with support from Bloomberg Automation.

– With support from Winnie Hsu and Richard Henderson.

Article content