← Go back Dec 12, 2023
US equity contracts slid as traders pushed back on optimistic scenarios that central bankers will cut interest rates in time to avert recession. Futures signaled another day of declines for the S&P 500, after the benchmark rose last week to its highest since March 2022 on bets the Federal Reserve would soon pivot to monetary easing. Treasury yields were steady near 4.2%. Investors are starting December riddled with doubt as November’s epic rally fizzles. What had become the prevailing wisdom last month — that a “Goldilocks” scenario can be fulfilled by US central bankers in early, rapid rate cuts in 2024 — is now grounds for debate. US jobs data later in the week is seen as a key piece of the puzzle to understanding the economy and the risk that wage growth fans inflation, leading to higher borrowing costs for longer. “It’s remarkable how quickly we’ve swung from different market narratives this year,” Hugh Gimber, global market strategist for JPMorgan Asset Management in London, said in an interview on Bloomberg Television. “Now it feels like we’ve gone full circle again.” A rally in November snowballed on hopes that global central bankers were ready to shift to easy policy now that inflation has cooled. Money markets have priced in a 70% chance the US central bank will cut rates in the first quarter, and have priced in as many as five, quarter-point reductions by the end of 2024. In premarket trading, Take-Two Interactive shares declined after the company’s Rockstar Games unit released the first trailer for the highly-anticipated video game. With the title planned for 2025, analysts were disappointed by the lack of an exact release date. Robinhood gained after the online brokerage said November crypto notional trading volumes were about 75% above October levels. German markets got a boost from comments from European Central Bank policymaker Isabel Schnabel that further interest rate hikes are unlikely. The DAX Index added 0.2%, closing in on a record high and outperforming the broader Stoxx 600, which traded flat. Mainland China and Hong Kong stocks slumped in the wake of a move by Moody’s Investors Service to cut its outlook on the nation’s sovereign debt to negative. The MSCI China Index slid as much as 2.3% toward its lowest close since November 2022. On the mainland, the benchmark CSI 300 Index finished 1.9% lower as foreigners sold the largest amount of shares since mid-October. Elsewhere, oil steadied after three days of losses. Saudi Arabia said recent cuts by OPEC+ would be honored in full and could be extended. Bitcoin held near a 19-month high, just below the $42 000 mark. Some of the main moves in markets:
Read more: moneyweb
