Stocks, Futures Fall on Worry Over Growth Outlook: Markets Wrap


(Bloomberg) — Stocks declined along with U.S. and European equity futures Thursday as investors continued to fret over a slower economic recovery and the prospect of reduced central bank stimulus. The dollar advanced.

MSCI Inc.’s Asia-Pacific gauge was on track for the biggest decline in three weeks as Japan ended a prolonged winning streak, sapped by a plan to extend a virus emergency for Tokyo and other areas.

China’s technology stocks slid after officials told firms including Tencent Holdings Ltd. and Netease Inc. to end their focus on profit in gaming, again highlighting Beijing’s regulatory crackdown. Indebted developer China Evergrande Group plunged to the lowest since 2015. Australian equities tumbled as the nation grapples with a delta-strain outbreak.

The S&P 500 retreated for a third day overnight and the Nasdaq 100 posted the biggest drop in two weeks. A Federal Reserve survey signaled a moderation in economic growth due to the delta virus strain. Treasury yields retreated.

A rally that took global stocks to records has cooled as investors await more signs that economic reopening can overcome challenges posed by the delta variant. Another concern is the prospect of a gradual reduction in monetary-policy support, with the focus on the European Central Bank meeting later Thursday. Meanwhile, a surge in Chinese factory-gate inflation highlighted price pressures in the global economy.

Fear of delta “is driving the downside risks to the U.S. economy, but also more broadly the global economy as that delta strain spreads around the world,” Kim Mundy, currency strategist and international economist at the Commonwealth Bank of Australia, said on Bloomberg Television.

In the latest Federal Reserve comments, Dallas President Robert Kaplan said based on the current outlook he would back a September announcement of a tapering in bond purchases and a possible start in October. Bank of New York President John Williams said “it could be appropriate” for the U.S. central bank to begin tapering its bond-buying program before the year is out.

Elsewhere, oil was steady amid a slow return of U.S. output after Hurricane Ida and Bitcoin traded around $46,000.

What to watch this week:

U.S. President Joe Biden may make his choice this week on whether to renominate Fed Chair Jerome Powell to a second termECB President Christine Lagarde holds a press conference after the bank’s rate decision ThursdayChina PPI, CPI, new yuan loans, money supply, aggregate financing, Thursday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures declined 0.4% as of 7:05 a.m. in London. The S&P 500 fell 0.1%Nasdaq 100 futures dipped 0.3%. The Nasdaq 100 fell 0.4%Japan’s Topix index shed 0.7%Australia’s S&P/ASX 200 Index lost 1.9%South Korea’s Kospi index fell 1.5%Hong Kong’s Hang Seng Index was down 1.9%China’s Shanghai Composite index was steadyEuro Stoxx 50 futures fell 0.6%

Currencies

The Japanese yen was at 110.14 per dollar, rising 0.1%The offshore yuan was at 6.4602 per dollarThe Bloomberg Dollar Spot Index rose 0.1%The euro traded at $1.1815

Bonds

The yield on 10-year Treasuries was at 1.33%Australia’s 10-year yield fell three basis points to 1.27%

Commodities

West Texas Intermediate crude was at $69.42 a barrelGold was at $1,788.59 an ounce

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