(Bloomberg) — European stock futures rose, tracking a record close for the S&P 500, on optimism about U.S. rate cuts after Federal Reserve Chairman Jerome Powell said inflation was falling again.
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The MSCI AC Asia Pacific Index headed for its longest winning streak since May. Japanese stocks rose, with the benchmarks now within 1% of their record highs. SoftBank Group Corp. shares traded above their lifetime closing highs for the first time in three years, buoyed by a global surge in AI and chip investment. Singapore stocks outperformed on the strength of banking stocks.
Futures contracts for the S&P 500 fell slightly after the benchmark closed above 5,500 for the first time, the gauge’s 32nd record this year. Tesla Inc. rose 10% to lead gains in mega-caps, helping the Nasdaq 100 close above 20,000 for the first time.
The new record highs for the S&P 500 and the Nasdaq “could also be seen as another victory given the psychological significance of ‘round numbers,’” said Chris Weston, head of research at Pepperstone Group in Melbourne.
Elsewhere, Australia’s three-year yield continued to rise after better-than-expected retail sales data reinforced the need for a rate hike.
Investors are looking to initial U.S. jobless claims and ADP employment data due Wednesday for more clues about the policy outlook. Fed Chair Powell acknowledged that the central bank has made “fairly good progress” in curbing inflation, but stressed that officials need more evidence before cutting interest rates.
In China, services activity expanded at the slowest pace in eight months in June, a private gauge showed, a slowdown that could add to concerns about the economic outlook. Shares in Hong Kong rose while those on the mainland fell.
In the U.S., stocks continue to defy doomsayers on solid corporate earnings, AI mania and expectations of falling interest rates, adding more than $16 trillion to the S&P 500’s value from its October 2022 close. The lack of a meaningful pullback has bulls confident the rally is sustainable.
While the U.S. market closes early on Wednesday for the Thursday, July 4 holiday, investors are also bracing for the all-important U.S. payrolls report due Friday. Economists expect the report to show employers added about 190,000 workers in June and the unemployment rate likely held steady at 4%.
Elsewhere, oil prices rose to near two-month highs, while the Bloomberg Dollar Spot Index and Treasury yields were little changed.
Important events this week:
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Eurozone S&P Global Eurozone Services PMI, PPI, Wednesday
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US Fed Minutes, ADP Employment, ISM Services, Factory Orders, Initial Jobless Claims, Durable Goods, Wednesday
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Fed’s John Williams to speak Wednesday
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UK General Election, Thursday
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American Independence Day, Thursday
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Eurozone retail sales, Friday
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US Jobs Report, Friday
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Fed’s John Williams to speak Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures were down 0.1% at 6:36 a.m. London time
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Nikkei 225 futures (OSE) rose 1.4%
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Japan’s Topix rose 0.6%
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Australia’s S&P/ASX 200 rose 0.2%
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Hong Kong’s Hang Seng rose 0.9%
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The Shanghai Composite fell 0.5%
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Euro Stoxx 50 futures rose 0.4%
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Nasdaq 100 futures were little changed
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Australia’s S&P/ASX 200 rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro remained virtually unchanged at $1.0739
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The Japanese yen fell 0.2% to 161.81 per dollar
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The offshore yuan remained virtually unchanged at 7.3102 per dollar
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The Australian dollar remained virtually unchanged at $0.6673
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The British pound remained virtually unchanged at $1.2681
Cryptocurrency
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Bitcoin fell 1.7% to $60,874.68
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Ether fell 1.7% to $3,356.87
Bonds
Raw materials
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West Texas Intermediate crude rose 0.5% to $83.21 a barrel
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Spot gold rose 0.2% to $2,334.30 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Rob Verdonck.
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