Stocks and bonds fall as Fed and election risks impact: Markets wrap

(Bloomberg) — Treasuries steadied after Monday's selloff, while stock futures fell as traders speculated on the path of U.S. interest rates.

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US futures fell 0.2%, with the S&P 500 poised to post its first consecutive decline in six weeks. The European Stoxx 600 index recorded small movements. The 10-year Treasury yield added 1 basis point to 4.21% after rising 11 basis points yesterday. There was little change in the dollar.

Monday's bond decline came as investors trimmed their expectations for a rate cut from the Federal Reserve after central bank officials signaled their preference for lower interest rates at a slower pace. Additionally, traders are weighing the inflationary impact of a potential Donald Trump presidential win, given that promised tax cuts and trade tariffs may eventually lead to faster price growth and higher rates.

“This is very clearly linked to the trade-off of a Republican victory — and therefore to an agenda that would be much more inflationary than the Democrats’ agenda. “We are in a market that is betting on Trump,” said Christopher Dembeck, chief investment adviser at Pictet Asset Management. “The rise in yields is starting to threaten.” stock markets.”

Bonds are selling off everywhere as traders rethink the Fed's path

Gold rose – approaching Monday's record high – as safe-haven traders paid attention to geopolitical risks, including conflict in the Middle East and the US election. Oil fell after rising about 2% on Monday.

Pictet's Dembeck noted that the pressure on stocks from the bond market comes with Europe in the midst of a downbeat earnings season. So far, about 47% of MSCI companies in Europe have reported results below expectations while only 27% have achieved results that exceed expectations, according to data compiled by Bloomberg Intelligence.

The company's most prominent features:

• Germany's SAP index rose as much as 5.6% after posting a beat on several key metrics in the third quarter and boosting some elements of its full-year guidance.

• Shares of Hyundai Motor India Ltd. fell at its debut in Mumbai on Tuesday after the company raised $3.3 billion in the country's largest-ever initial public offering. Tokyo Metro Co.'s initial public offerings were met with positive reviews. and Horizon Robotics Inc. With a strong request.

Main events this week:

• Christine Lagarde, President of the European Central Bank, gave an interview to Bloomberg TV on Tuesday

• Andrew Bailey of the Bank of England, Klas Knott of the European Central Bank and Robert Holzman will speak at the Bloomberg Global Regulatory Forum in New York, Tuesday.

• Philadelphia Federal Reserve Bank President Patrick Harker speaks Tuesday

• Interest rate decision in Canada, Wednesday

• Consumer confidence in the euro zone, Wednesday

• US Existing Home Sales, Wednesday

• Boeing, Tesla and Deutsche Bank earnings on Wednesday

• Fed Beige Book, Wednesday

• US New Home Sales, Unemployment Claims, and Global S&P Manufacturing and Services Purchasing Managers' Index, Thursday

• UBS, Barclays earnings, Thursday

• The Fed's Beth Hammack speaks Thursday

• US Durable Goods, University of Michigan Consumer Confidence, Friday

The story continues

Some key movements in the markets:

Stocks

• The Stoxx Europe 600 Index was down 0.1% as of 8:50 AM London time

• S&P 500 futures fell 0.2%

• Nasdaq 100 futures fell 0.3%

• Dow Jones Industrial Average futures fell 0.2%

• MSCI Asia Pacific Stock Index fell 1%

• MSCI Emerging Markets Index fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%.

• The euro rose 0.2 percent to $1.0834

• There was little change in the Japanese yen at 150.97 to the dollar

• There was little change in the yuan in external transactions at 7.1334 to the dollar

• The British pound rose 0.2 percent to $1.3007

Cryptocurrencies

• Bitcoin fell 0.3% to $67,493.66

• Ethereum fell 0.9% to $2,651.08

Bonds

• The yield on 10-year Treasury bonds rose 1 basis point to 4.21%.

• The yield on 10-year German bonds rose four basis points to 2.32%.

• The yield on British 10-year bonds rose four basis points to 4.17%.

Goods

• Brent crude fell 0.8 percent to $73.73 a barrel

• Spot gold rose 0.5 percent to $2,734.17 per ounce

This story was produced with assistance from Bloomberg Automation.

-With assistance from Jason Scott, Winnie Hsu, Abhishek Vishnoi, and Aya Wagatsoma.

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