U.S. equity-index futures posted modest gains on Wednesday as China’s move to reopen its economy modestly lifted investor sentiment in the final week of a disappointing year for markets.
S&P 500 futures were volatile after the index fell 0.4% on Tuesday. Tesla Inc. Shares rose more than 4% in premarket trading, on track to break a seven-day losing streak amid concerns about lack of demand. Treasury yields slid as global bond selloff eased and the dollar gauge slipped.
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The Stokes Europe 600 index advanced led by basic resource companies as industrial metals including copper advanced. Most European bonds gained, with Germany’s 10-year yield falling more than five basis points.
A still-cautious mood is dampening hopes of a rally in the final trading week of 2022 after a brutal year for financial markets. Global equities have lost a fifth of their value, the biggest annual decline since 2008, and an index of global bonds fell 16%. The dollar has gained 7% and the US 10-year yield has risen from just 1.5% to 3.80% at the end of 2021.
Reports that China will drop quarantine requirements for incoming visitors and begin issuing passports and Hong Kong travel permits to mainland residents could be a boost for the global economy, but they are also worrying about inflationary pressures. are also raising concerns that could prompt the Federal Reserve to keep tight. monetary policy.
“We could get a pivot from the Fed later next year where they actually start cutting rates, but it’s going to happen when conditions are higher than now,” said Matt Maley, chief market strategist at Miller Tabak. It’s about to get more serious.” + Co., Bloomberg TV said on Tuesday. “If we have this slow grinding low, the Fed is going to keep interest rates high even if they stop raising rates anyway.”
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Oil sank amid thin liquidity as investors weighed the fallout from a Russian ban on exports to buyers adhering to price caps. Iron ore rose to its highest since early August, while copper gained in New York as China’s withdrawal of pandemic restrictions boosted prospects for demand for the commodity in 2023.
