(Bloomberg) — Oil rose on Saudi Arabia’s pledge to cut supply. US stock futures fluctuated after last week’s sharp rally, which took the S&P 500 to the brink of a bull market.
Most Read from Bloomberg
Crude futures rose 1.9%, with oil giants such as Chevron Corp. and Exxon Mobil Corp. up in premarket trading. Saudi Arabia announced it will make an extra 1 million barrel-a-day supply cut in July, taking its production to the lowest level for several years.
In US markets, a drop in Nasdaq 100 contracts signaled a pause in the tech rally. Still, Apple Inc. rose 0.6% in premarket trade, poised to hit a fresh record ahead of its most significant product launch in nearly a decade.
Treasury yields rose across the curve, while the dollar strengthened against all its Group-of-10 peers. There’s increasing speculation that the Federal Reserve plans to keep interest rates steady in June, but keep options open for later hikes.
“I think we are traversing a period where there is something for everyone in different pieces of economic data,” said Mark Dowding, CIO at BlueBay Asset Management. “What is clear is that there is no abrupt slowing just yet. In summary, we are in an environment where it makes sense to wait and see. Central banks will be reacting to data and it makes sense to assess this before taking a clearer view.”
Reports on US services and factory orders due later today may provide further clues on the health of the economy.
Morgan Stanley strategists wrote in a note that they’re bullish on equities in Japan, Taiwan and South Korea, but anticipate a sudden pullback in corporate earnings will slam the brakes on US stocks.
“We think that the downside risk to US earnings is now,” they wrote in a note published Sunday. “While a deteriorating liquidity backdrop is likely to put downward pressure on equity valuations over the next three months, we also see EPS disappointment ahead as revenue growth slows and margins contract further.”
Meanwhile, Japanese stocks continued to storm higher. The Nikkei 225 added 2.2% on Monday as investors bet that the weak yen will boost corporate profits.
Key events this week:
-
US factory orders, ISM services, Monday
-
ECB President Christine Lagarde appears in European Parliament, Monday
-
Rate decisions in Australia, Poland, Tuesday
-
China forex reserves, trade, Wednesday
-
US trade, consumer credit, Wednesday
-
Canada rate decision, Wednesday
-
EIA crude oil inventory data, Wednesday
-
Eurozone GDP, Thursday
-
Rate decisions in India, Peru, Thursday
-
Japan GDP, Thursday
-
US wholesale inventories, initial jobless claims, Thursday
-
China PPI, CPI, Friday
Some of the main moves in markets:
Stocks
-
S&P 500 futures were little changed as of 6:35 a.m. New York time
-
Nasdaq 100 futures fell 0.2%
-
Futures on the Dow Jones Industrial Average were little changed
-
The Stoxx Europe 600 was little changed
-
The MSCI World index was little changed
Currencies
-
The Bloomberg Dollar Spot Index rose 0.3%
-
The euro fell 0.2% to $1.0689
-
The British pound fell 0.5% to $1.2386
-
The Japanese yen fell 0.3% to 140.36 per dollar
Cryptocurrencies
-
Bitcoin fell 1.8% to $26,771.8
-
Ether fell 1.8% to $1,870.27
Bonds
-
The yield on 10-year Treasuries advanced five basis points to 3.74%
-
Germany’s 10-year yield advanced seven basis points to 2.39%
-
Britain’s 10-year yield advanced seven basis points to 4.22%
Commodities
-
West Texas Intermediate crude rose 1.9% to $73.12 a barrel
-
Gold futures fell 0.5% to $1,959.40 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Hooyeon Kim, Tassia Sipahutar and Anchalee Worrachate.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.