Stocks decline on signs of surpassing November high: Markets wrap

(Bloomberg) — European stocks fell for a second day, and U.S. futures pointed to a weaker open on Wall Street amid signs that November’s stock rally has gone too far.

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The Stoxx 600 fell 0.6%, while contracts on the S&P 500 fell. LVMH led a decline in European luxury goods stocks as HSBC Holdings Plc cut its price targets across the sector. The shares of the Dutch biotechnology company Argenx SE fell by as much as 17% after preliminary results indicated that its only drug had failed in the trial.

The dollar fell, and is heading towards its largest monthly decline in a year. Treasury bonds stabilized after the gains they achieved in the previous session.

Expectations that interest rates have peaked and the economy will avoid a recession have spurred stocks and government bonds this month. Now, strategists at Citigroup say one of the S&P 500’s best November rallies in a century is running out of steam, and that net positions in the benchmark index look “slightly bearish.”

Read more: Citi’s Montagu says US stocks’ sharp rally is running out of steam

Meanwhile, central bankers from Australia, England and Thailand warned that the monetary policy outlook remains uncertain. ECB President Joachim Nagel said the ECB has not yet reached the point where it should consider lowering borrowing costs.

“U.S. markets seem to be taking a break after Thanksgiving, so you feel some weakness in Europe as well,” said Kamel Dimesh, partner at North of South Capital in London.

Traders will be watching a series of speeches from Federal Reserve officials on Tuesday, with another batch of economic data scheduled for release this week, including the Fed’s preferred measure of core inflation.

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Elsewhere, gold was little changed, hovering near its highest level since May. Oil ended three days of declines as the market weighs the possibility of deeper production cuts from OPEC+.

Main events this week:

  • NATO Foreign Ministers meet in Brussels Tuesday-Wednesday

  • European Central Bank Governing Council member Pablo Hernandez de Cos and Bank of England Deputy Governor Dave Ramsden speak on Tuesday.

  • Consumer confidence index issued by the US Conference Board, Tuesday

  • Fed Governor Chris Waller and Chicago Fed President Austin Goolsbee speak Tuesday

  • Interest rate decision in New Zealand, Wednesday

  • The OECD releases its semi-annual economic forecasts on Wednesday

  • Eurozone economic confidence, consumer confidence, Wednesday

  • Bank of England Governor Andrew Bailey speaks on Wednesday

  • US wholesale inventories and GDP on Wednesday

  • Cleveland Fed President Loretta Mester speaks Wednesday

  • The Fed releases its Beige Book on Wednesday

  • China Non-Manufacturing PMI, Manufacturing PMI, Thursday

  • OPEC+ meeting Thursday

  • Eurozone CPI, unemployment, Thursday

  • US Personal Income, Personal Consumption Expenditures Deflator, Initial Jobless Claims, Pending Home Sales, Thursday

  • China Caixin Manufacturing PMI, Friday

  • S&P Eurozone Global Manufacturing PMI, Friday

  • US Construction Spending, ISM Manufacturing, Friday

  • Federal Reserve Chairman Jerome Powell will participate in a “fireside chat” in Atlanta on Friday

  • Chicago Fed President Austin Goolsbee speaks Friday

Some key movements in the markets:

Stores

  • The Stoxx Europe 600 Index was down 0.6% as of 11:22 a.m. London time

  • S&P 500 futures were little changed

  • Nasdaq 100 futures were little changed

  • Dow Jones Industrial Average futures were little changed

  • MSCI Asia Pacific Stock Index rose 0.2%

  • MSCI Emerging Markets Index rises 0.5%

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Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • There was little change in the euro at $1.0955

  • There was little change in the Japanese yen at 148.61 to the dollar

  • There was little change in the yuan in external transactions at 7.1607 to the dollar

  • There was little change in the pound sterling at $1.2634

Digital currencies

  • Bitcoin rose 0.4% to $37,168.44

  • Ethereum rose 0.4% to $2,023.37

Bonds

  • The yield on 10-year Treasury bonds rose one basis point to 4.40%.

  • There was little change in the yield on 10-year German bonds at 2.55%.

  • There was little change in the yield on British 10-year bonds at 4.22%.

Goods

This story was produced with assistance from Bloomberg Automation.

– With assistance from Tasya Sibahutar.

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