(Bloomberg) — Stock markets stumbled on the final day of the month on fears that the Federal Reserve would stick to its hawkish message 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 fell 0.4%. Carmakers Volkswagen AG, Mercedes-Benz Group AG and Stellantis NV fell, offsetting better-than-expected European economic data. The Bloomberg Dollar Spot Index rose and the 10-year Treasury yield was steady at 4.62%.
Stocks are poised to end the first monthly decline of 2024, with the S&P 500 down 2.6% in April. Amazon.com Inc., McDonald’s Corp and Coca-Cola Co. will report later today. Fed Chairman Jerome Powell is likely to increase expectations that interest rates will stay higher for longer after Wednesday’s interest rate announcement, according to Bloomberg Economics.
“The mood is positive but cautious,” said Peter Rosenstreich, head of investment products at Swissquote. “There has been a lot of hype around interest rates, earnings and the macroeconomic environment – now markets want to see the results.”
In corporate news, HSBC Holdings Plc rose more than 3% following 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 of the bank’s growth plans.
Elsewhere, oil prices suffered their biggest fall in almost two weeks amid discussions about a possible ceasefire in the Middle East.
Momentum jump?
According to Goldman Sachs Group Inc.’s trading division, momentum traders will buy stocks next week regardless of market direction.
Commodity trading advisors – funds that use systematic strategies to trade futures contracts – are faced with about $106 billion in long positions after April’s decline, wrote Cullen Morgan, an equity derivatives and flows specialist at the bank, in a note. This should provide a boost for global stocks after a difficult month.
Company highlights:
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Volkswagen AG’s first-quarter earnings fell after car sales fell and costs of introducing new models weighed on profitability.
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Mercedes-Benz Group AG’s earnings plunged 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 profit for the first time since 2022.
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According to the information, Elon Musk plans hundreds more job cuts at Tesla Inc. as two more senior executives leave the company.
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Deutsche Lufthansa AG said it would launch a cost-cutting measure at its namesake airline that includes freezing projects and reviewing hiring in some areas
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Adidas AG reported increased profitability in the first quarter, helped by demand for sneakers like the Samba and inventory levels declining to healthier levels.
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Stellantis NV’s sales fell 12% in the first quarter, driven by declines in the U.S., where the switch to the redesigned Ram 1500 led to a drop in sales and the automaker predicted new models would boost growth later in the year.
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Carlsberg A/S said it would launch a new quarterly share buyback program after sales and beer volumes rose in the first quarter, boosted by performance in Asia.
Important events this week:
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US Employment Cost Index, Conf. Board of Consumer Confidence, Tuesday
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Amazon, Samsung, HSBC results Tuesday
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Wednesday, public holiday in large parts of Europe
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Treasury Department Quarterly Refund Announcement, Wednesday
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US ADP Employment Changes, JOLTS Job Vacancies, ISM Manufacturing, Wednesday
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Federal Reserve interest rate decision, Wednesday
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Eurozone S&P Global Manufacturing PMI, Thursday
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U.S. factory orders, initial jobless claims, trading, Thursday
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Apple earnings, Thursday
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Unemployment in the Eurozone, Friday
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US Unemployment, Non-Farm Payrolls, ISM Services, Friday
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Chicago Fed President Austan Goolsbee speaks Friday
Some of the key moves in the markets:
Shares
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S&P 500 futures fell 0.2% at 5:55 a.m. New York time
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Nasdaq 100 futures fell 0.2%
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The futures on the Dow Jones Industrial Average hardly changed
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The Stoxx Europe 600 fell 0.4%
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The MSCI World Index has hardly 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
Tie up
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The 10-year Treasury yield rose one basis point to 4.63%
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The 10-year German government bond yield rose two basis points to 2.55%
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The 10-year UK government bond yield rose two basis points to 4.31%
raw materials
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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 support from Bloomberg Automation.
– With support from Winnie Hsu and Aya Wagatsuma.
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