Investors see plenty to keep equities climbing after a stellar rally
by Andre Janse van Vuuren
US stocks are set for a quieter finish to a busy week in which the Federal Reserve’s first step in a likely series of rapid interest rate cuts propelled markets to fresh records.
Futures for major US stock benchmarks were little changed after the S&P 500, the Nasdaq 100, the Dow Jones Industrial Average and the Russell 2000 closed at all-time highs. US Treasuries saw stronger shifts, with the 10-year yield rising two basis points to 4.12%. The dollar was on course for its longest streak of gains since July.
Looser policy is giving equity bulls a tailwind just as lofty valuations run up against bearish seasonal trends. Investors see plenty to keep equities climbing after a stellar rally, with upbeat earnings and a resilient economy driving momentum.
“It’s clear the Fed is willing to support growth and the jobs markets, versus caring too much about inflation, though we have to see how that translates into the economy,” said Andrea Gabellone, head of global equities at KBC Global Services. “Financial conditions are now easier.”
For US stocks, not even Friday’s $5 trillion quarterly triple-witching options expiry is likely to drive volatility, with traders focusing rather on the next nonfarm payrolls report for bigger moves.
Asian equities fell after the Bank of Japan said it will begin selling its massive exchange-traded fund holdings. The central bank also kept its policy rate at 0.5%, as expected.
The yen climbed as much as 0.5% after two dissenters opposed the decision to hold, but gave up the gain when Governor Kazuo Ueda said he needs more data before deciding next steps, seemingly downplaying the chance of an October hike.
Investors will also be focusing on a phone call between President Donald Trump and his Chinese counterpart Xi Jinping later Friday.
The conversation promises to determine the fate of TikTok — and potentially ease trade tensions between the world’s two biggest economies. US grain futures rose across the board on Friday ahead of the call.
“A deal for the social media app might act as a catalyst for improving the relationship between the two largest economies amid an ongoing trade war,” Danske Bank strategists wrote.
Corporate News:
- Early sales across Asia showed strong demand for Apple Inc.’s iPhone 17 Pro models.
- Jefferies Financial Group Inc. has approved a proposal by Sumitomo Mitsui Financial Group Inc. to raise its ownership as their partnership deepens, a person with knowledge of the matter said.
- Adani Enterprises Ltd.’s shares gained as much as 5.2% after India’s securities market regulator cleared the group’s billionaire-founder Gautam Adani of some allegations of impropriety raised by the US short seller Hindenburg Research in early 2023.
- Zijin Gold International Co. is seeking to raise HK$25 billion ($3.2 billion) for an initial public offering in Hong Kong that’s poised to be the world’s biggest deal of its kind since May.
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 10:09 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index fell 0.3%
- The MSCI Emerging Markets Index fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.2% to $1.1766
- The Japanese yen rose 0.1% to 147.82 per dollar
- The offshore yuan was little changed at 7.1134 per dollar
- The British pound fell 0.4% to $1.3501
Cryptocurrencies
- Bitcoin fell 0.5% to $116,980.45
- Ether fell 1.4% to $4,541.24
Bonds
- The yield on 10-year Treasuries advanced two basis points to 4.12%
- Germany’s 10-year yield advanced one basis point to 2.74%
- Britain’s 10-year yield advanced one basis point to 4.69%
Commodities
- Brent crude fell 0.6% to $67.03 a barrel
- Spot gold rose 0.3% to $3,656.92 an ounce
This story was produced with the assistance of Bloomberg Automation.
Copyright Bloomberg News
