Equity Rally Sputters Amid Fizzling Fed-Pivot Talk: Markets Wrap

(Bloomberg) — U.S. index futures and European stocks fell as investors paused from a rally fueled by bets on less aggressive central banks and looked for more evidence that inflation is is moderating

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December contracts on the S&P 500 and Nasdaq 100 each fell 0.6% after the underlying indexes scaled two-week highs on Tuesday. Europe’s Stoxx 600 halted its best three-day advance since November 2020. Oil was little changed ahead of an OPEC+ meeting where a supply cut could be announced. Treasuries fell and the dollar swung between gains and losses.

A growing cohort of money managers warn that expectations for the Federal Reserve’s so-called pivot are overblown and risk ignoring the economic pain that would underpin such a peaceful tilt if policymakers opt for it. With US jobs figures due on Friday and a new season of earnings reports on the horizon, traders are in a wait-and-see mood for more catalysts.

“A conciliatory pivot requires further evidence of weaker growth and a decisive drop in inflation,” Emmanuel Cau, head of European equity strategy at Barclays Plc, wrote in a note. “We doubt the stock is out of the woods yet.”

Shares gained ground across Asia as markets in the region caught up with overnight moves in the US. Hong Kong shares posted their best rally since March after a one-day hiatus.

Europe’s benchmark equity index fell 0.5%, paring some of its 5.3% advance over the previous three days, as real estate, auto parts and telecoms shares fell more.

US Treasuries fell across the curve, with the 10-year yield adding 4 basis points. The dollar rose 0.2% after falling 0.1% earlier.

Wset Texas Intermediate oil futures held above $86 a barrel, while trading with modest losses. The OPEC+ grouping is ready to discuss cutting output by up to 2 million barrels a day, delegates said ahead of the group’s meeting in Vienna.

Meanwhile, investors’ attention remained focused on Friday’s non-farm payrolls data, in which expectations are for a gain of 263,000 jobs in September.

“For the market to continue higher, the jobs data will have to be in line with expectations or be below,” said Lindsey Bell, head of markets and currency strategist at Ally.

Key events this week:

  • Eurozone PMI services, Wednesday

  • The OPEC+ meeting starts on Wednesday

  • Raphael Bostic of the Fed speaks, Wednesday

  • The Reserve Bank of New Zealand meets on Wednesday

  • Eurozone retail sales, Thursday

  • Initial US Jobless Claims, Thursday

  • The Fed’s Charles Evans, Lisa Cook and Loretta Mester speak at events Thursday

  • US Unemployment, Wholesale Inventories, Non-Farm Payrolls, Friday

  • BOE Deputy Governor Dave Ramsden speaks at the event on Friday

  • The Fed’s John Williams speaks at the event on Friday

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Some of the main movements in the markets:


  • The Stoxx Europe 600 was down 0.5% at 8:31 a.m. London time

  • S&P 500 futures fell 0.6%

  • Nasdaq 100 futures fell 0.6%

  • Dow Jones Industrial Average futures fell 0.6%

  • The MSCI Asia Pacific index rose 1.9%

  • The MSCI Emerging Markets index rose 2%


  • The Bloomberg Dollar Spot index rose 0.2%

  • The euro fell 0.3% to $0.9955

  • The Japanese yen fell 0.2% to 144.43 per dollar

  • The offshore yuan rose 0.1% to 7.0311 per dollar

  • The British pound fell 0.4% to $1.1429


  • Bitcoin fell 0.5% to $20,231.04

  • Ether fell 0.6% to $1,354.1

good ones

  • The 10-year Treasury yield advanced five basis points to 3.68%

  • Germany’s 10-year yield advanced seven basis points to 1.94%

  • UK 10-year yield advanced six basis points to 3.93%


  • Brent crude fell 0.2% to $91.63 a barrel

  • Spot gold fell 0.4% to $1,718.55 an ounce

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