U.S. stock futures wobbled, bond yields rose and oil hit its highest level in nearly three years, as investors bet on further economic reopening, but remained concerned about supply-chain disruptions.
Futures tied to the S&P 500 edged down 0.4%, suggesting the broad-market index is set to end its three-day rise. Dow Jones Industrial Average futures were relatively flat, while futures for the tech-heavy Nasdaq-100 fell 0.9%.
Oil prices rose as supply constraints continued to draw on inventories around the world and the rally in natural gas prices also pushed up crude, according to ANZ Research analysts. Global benchmark Brent crude gained 1.9% and traded at $78.70 a barrel, hitting the highest level since Oct. 2018.
Stocks swung last week as fears about Evergrande’s debt problems weighed on markets. Despite the Chinese property developer missing a bond coupon payment, the S&P 500 still finished the week up 0.5%. Federal Reserve Chairman Jerome Powell helped boost confidence when he said the U.S. economy has recovered sufficiently for the central bank to potentially announce the start of bond-purchase tapering at its next meeting.
The near-term prospect of central banks pulling back stimulus is sending bond yields up and weighing on stocks, according to Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management.
“It’s another rotation driven by the bond market. When growth [stocks] do poorly, it tends to be the biggest part of the market cap of indexes so this weighs” on the broader market, he said. Technology stocks are particularly sensitive to rising interest rates.
The yield on the 10-year benchmark U.S. Treasury note ticked up to 1.494% Monday from 1.459% Friday, reaching the highest intraday level since June. This extended into a fifth day a rise that drove the biggest weekly increase since March. European sovereign bond yields climbed as well, with the German 10-year bund yield reaching minus 0.201%, the highest since July.
In Asia, major benchmarks were mixed Monday. The Shanghai Composite Index slipped 0.8%, while Hong Kong’s Hang Seng Index edged up 0.1%. Evergrande shares rallied 8%, but remained down more than 80% for the year. China Evergrande New Energy Vehicle Group, a subsidiary of the Evergrande parent company, scrapped plans to list on the Shanghai Stock Exchange.
Hong Kong-listed shares of Sunac China, another major property developer, dropped over 9% and closed at their lowest in more than four years. Investors grew concerned that the company could run into similar problems as Evergrande, after a document circulated that showed a Sunac unit asking for government help to ease its liquidity difficulties.
The DAX, Germany’s benchmark stock index, rose 0.3%. Germans voted for a new chancellor over the weekend. The initial results showed a tight race that will likely mean lengthy coalition talks and no major changes to policy, according to Peter Schaffrik, a global macro strategist at RBC Capital Markets.
“For markets, this means continuity. At the end of the day, it will remain a centrist government in all cases,” Mr. Schaffrik said. “Germany’s fiscal stance will remain within the boundaries of what the market will find easily acceptable.”
The pan-continental Stoxx Europe 600 retreated 0.2%, with stocks that benefit from the loosening of pandemic restrictions gaining. Office-landlord and WeWork competitor IWG rose nearly 7%. Travel stocks rallied. International Consolidated Airlines Group rose 5% and Aeroports de Paris climbed 6%.
Rolls Royce jumped nearly 9%, rising for a second trading session after the jet-engine maker won a deal to supply the U.S. Air Force fleet of B-52 bombers. Cinema chain Cineworld advanced 10% as a new James Bond film spurred an uptick in bookings.
In U.S. premarket trading, special-purpose acquisition company Gores Guggenheim surged rose 5% after it agreed to merge with Swedish electric-vehicle maker Polestar in a $21 billion deal.
Fresh data showed a 1.8% rise in new U.S. orders for durable goods in August, stronger than economists expected, as business investment and consumer spending picked up.
Bitcoin climbed 1% compared with its level at 5 p.m. Friday, recovering some ground after a steep decline prompted by the Chinese government outlawing cryptocurrency transactions. The digital currency traded around $43,500.
Shares of Hong Kong-listed Huobi Technology Holding, a unit of Huobi Global that operates a cryptocurrency platform, tumbled over 21% Monday.
This story has been published from a wire agency feed without modifications to the text
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