US equities drifted at the start of a week packed with corporate earnings and economic data that may help illuminate the Federal Reserve’s path for interest rates.
(Bloomberg) — US equities drifted at the start of a week packed with corporate earnings and economic data that may help illuminate the Federal Reserve’s path for interest rates.
The S&P 500 was little changed and the Nasdaq 100 shed 0.2% as manufacturing data arrived weaker than forecast and Treasury yields fell amid debt ceiling drama. Shares of Bed Bath & Beyond Inc. declined on plans to shutter all its stores. Meanwhile, the dollar was weaker against major peers, and oil rose.
“Investors are trying to look though all the economic data points as well as earnings comments to discern how the Fed is likely to move,” Paul Nolte, a senior wealth manager at Murphy & Sylvest Wealth Management, wrote in a note.
First Republic Bank fell in postmarket trading on an earnings beat but lower than expected deposits. The bank said its pursuing strategic options. And up next, Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc. will be reporting results later in the week. US GDP data is forecast to reveal slowing growth, and the so-called core PCE deflator, the Fed’s preferred inflation gauge, is expected to show price growth cooled.
Swaps markets continue to see interest rates peaking in the coming weeks before a series of cuts later in the year. But, not everyone holds this view. Leveraged investors boosted net short positions on 10-year Treasury futures to a record this month, data from the Commodity Futures Trading Commission show. That indicates they think Fed officials will keep raising rates to tackle inflation.
“Economic data continues to deny investors an obvious growth or policy signal. Demand isn’t falling fast enough to signal an imminent recession, but there are no indications of a reacceleration,” Dennis Debusschere at 22V Research wrote.
The yield on the US 10-year note fell six basis points and ended around 3.51%, testing its 200-day moving average.
In Europe, UBS Group AG climbed after takeover target Credit Suisse AG reported outflows that were lower than some expected. The Stoxx Europe 600 was little changed. Elsewhere, the new Bank of Japan Governor Kazuo Ueda will hold his first policy meeting this week. The bank is expected to soon start its policy review of the past decades.
Key events this week:
- US new home sales, consumer confidence, Tuesday
- South Korea GDP, Tuesday
- Australia CPI, Wednesday
- Sweden rate decision, Wednesday
- Eurozone economic, consumer confidence, Thursday
- US initial jobless claims, GDP, Thursday
- Bank of Japan meets on interest rates, Friday
- Euro-area GDP, Friday
- US personal income, Friday
Earnings highlights:
- Tuesday: Pepsi, General Motors, General Electric, McDonalds, Microsoft, UBS, UPS
- Wednesday: Boeing, Meta, Hilton
- Thursday: Amazon, American Airlines, Intel, Mastercard, Southwest Airlines, Hershey, Honeywell, Barclays
Some of the main moves in markets:
Stocks
- The S&P 500 was little changed as of 4 p.m. New York time
- The Nasdaq 100 fell 0.2%
- The Dow Jones Industrial Average rose 0.2%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.5% to $1.1043
- The British pound rose 0.4% to $1.2482
- The Japanese yen fell 0.1% to 134.31 per dollar
Cryptocurrencies
- Bitcoin fell 0.5% to $27,375.96
- Ether fell 1% to $1,830.4
Bonds
- The yield on 10-year Treasuries declined six basis points to 3.51%
- Germany’s 10-year yield advanced three basis points to 2.51%
- Britain’s 10-year yield advanced two basis points to 3.78%
Commodities
- West Texas Intermediate crude rose 1.1% to $78.76 a barrel
- Gold futures rose 0.4% to $1,999 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Robert Brand, Carly Wanna and Emily Graffeo.
(A previous verision was corrected to remove a timing reference to First Citizens earnings. Results will be held May 10.)
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