(Bloomberg) — U.S. futures fluctuated while European stocks dropped on Wednesday as risks from a highly infectious coronavirus strain trumped growing confidence in the global economic recovery.
Contracts on the S&P 500 Index were little changed while European shares declined, with cyclical stocks bearing the brunt of losses in the Stoxx 600 gauge. Airlines struggled as fears of the more contagious Delta variant continue to spur tourism curbs in the region. Japan and Hong Kong led modest losses in Asia.
Treasuries rose and the dollar was steady as traders digested the latest Fed comments. On asset purchases, Thomas Barkin said Tuesday he wants to see much more U.S. labor market progress before slowing them, while Christopher Waller said economic performance warrants thinking about pulling back on some stimulus. Oil rose, while Bitcoin slipped to trade around $34,600.
Wednesday’s cautious turn comes in the wake of surprisingly positive data from the U.S. and Europe that show surging confidence in the economic recovery. That suggests markets remain finely balanced between hopes for an imminent return to normal and fears that runaway inflation or Covid variants could derail the rebound.
“The environment in Q3 should still be supportive for risky assets, though fear of bouts of persistent inflation could alter this scenario,” Sebastien Galy, senior macro strategist at Nordea Investment Funds SA, wrote in a note. “We expect to see bouts of volatility from this.”
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Here are some events to watch in the markets this week:
OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation WednesdayChina’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party ThursdayOPEC+ ministerial meeting ThursdayECB President Christine Lagarde speaks FridayThe U.S. jobs report is due Friday
These are some of the main moves in markets:
Futures on the S&P 500 were little changed as of 7:15 a.m. New York timeFutures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average were little changedThe Stoxx Europe 600 fell 0.6%The MSCI World index fell 0.2%
The Bloomberg Dollar Spot Index was little changedThe euro fell 0.1% to $1.1885The British pound rose 0.2% to $1.3867The Japanese yen was little changed at 110.48 per dollar
The yield on 10-year Treasuries declined two basis points to 1.45%Germany’s 10-year yield declined three basis points to -0.20%Britain’s 10-year yield declined two basis points to 0.72%
West Texas Intermediate crude rose 1.4% to $73.99 a barrelGold futures fell 0.2% to $1,759.20 an ounce
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