US Futures Waver as Stocks Rally Seen Stretched: Markets Wrap

(Bloomberg) — US equity futures wavered on Tuesday as some investors questioned the sustainability of a powerful rally fueled by expectations of a Federal Reserve pivot to rate cuts.

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The S&P 500 had its strongest close since August and the Nasdaq 100 hit a 22-month high on Monday. But Goldman Sachs Group Inc. strategists said there is a risk of “disappointment in the near term” amid lingering concerns about economic growth and inflation, while Citigroup Inc. peers warned of the possibility of a short squeeze that could derail the rally.

The Stoxx Europe 600 index was flat, hovering near a two-month high. Basic resources shares led gains after iron ore surged on optimism about China’s latest economic stimulus drive. Banks and energy stocks underperformed.

Among individual movers, Banca Monte dei Paschi di Siena SpA dropped after Italy sold about 25% of its stake for approximately €920 million ($1 billion) as part of its plan to divest from the bailed out lender. MorphoSys AG plunged after the German biotech firm announced mixed results in a trial for a drug to treat myelofibrosis. Swiss medical devices firm Sonova Holding AG jumped after reporting results.

Meanwhile, emerging-market stocks and currencies extended gains as the weakening dollar spurred demand for risk assets. MSCI’s index of developing-nation stocks climbed to the highest level in almost three months, led by technology companies, while the gauge for currencies soared to a 22-month high.

Chinese developers’ bonds gained along with their shares after authorities began drafting a list of 50 real estate firms that would be eligible for a range of financing as Beijing sought to support the embattled property sector.

In the artificial intelligence space, OpenAI’s investors are still trying to return co-founder Sam Altman to a leadership role at the ChatGPT maker. Earlier, Microsoft Corp. climbed to fresh peaks after it hired Altman and Greg Brockman to lead its research team. In late US trading, Zoom Video Communications Inc. rose on better-than-expected sales, while Nvidia Corp. will report quarterly results Tuesday.

Elsewhere, oil pared a a two-day advance that was driven by speculation OPEC+ may deepen supply cuts at a meeting this weekend.

Key events this week:

ECB President Christine Lagarde and German Finance Minister Christian Lindner speak, Tuesday
US existing home sales, Tuesday
FOMC issues minutes from the Nov. 1 policy meeting, Tuesday
Nvidia’s earnings, Tuesday
Canada’s update to the government’s fiscal and economic outlook, Tuesday
Eurozone consumer confidence, Wednesday
US initial jobless claims, University of Michigan consumer sentiment, durable goods, Wednesday
Bank of Canada Governor Tiff Macklem speaks, Wednesday
Eurozone S&P Global Manufacturing & Services PMI, Thursday
Thanksgiving holiday — US markets closed — Thursday
ECB publishes account of October policy meeting, Thursday
Germany IFO business climate, Friday
US S&P Global Manufacturing PMI, Friday
Black Friday, traditional kick-off for the US holiday shopping season
ECB’s Christine Lagarde speaks, Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 9:26 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 rose 0.4%
The MSCI Emerging Markets Index rose 0.5%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%
The euro was little changed at $1.0948
The Japanese yen rose 0.5% to 147.67 per dollar
The offshore yuan rose 0.4% to 7.1374 per dollar
The British pound rose 0.2% to $1.2535

Cryptocurrencies

Bitcoin was little changed at $37,410.58
Ether fell 0.6% to $2,014.47

Bonds

The yield on 10-year Treasuries declined one basis point to 4.41%
Germany’s 10-year yield declined two basis points to 2.59%
Britain’s 10-year yield declined two basis points to 4.11%

Commodities

Brent crude fell 0.8% to $81.65 a barrel
Spot gold rose 0.4% to $1,986.18 an ounce

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Alice Atkins, Macarena Muñoz and Sagarika Jaisinghani.