Stocks and US Futures Fall Ahead of Inflation Gauge: Markets Wrap

(Bloomberg) — European stocks and U.S. futures fell ahead of the release of a U.S. inflation indicator that could influence the Federal Reserve’s policy outlook.

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Technology stocks led to a decline in the Stoxx Europe 600 index. Prosus NV slumped as much as 15% after China announced new restrictions on online gambling, dragging down some of the region’s biggest technology stocks including Tencent Holdings Ltd. Adidas AG and Puma SE slumped after U.S. rival Nike Inc. reported weak sales prospects. Delivery Hero SE fell more than 10% after announcing job cuts.

The core U.S. consumer spending price index is expected to have fallen to 3.3% in November from 3.5% the previous month, according to a Bloomberg survey of economists, ahead of figures released later on Friday. That could bolster expectations for Fed rate cuts next year after data on Thursday suggested the U.S. economy is slowing.

“The focus is on core PCE tonight and be aware of the razor-thin liquidity as we enter the holiday season as data surprises could exacerbate price action,” said Christopher Wong, foreign exchange strategist at Oversea-Chinese Banking Corp. in Singapore.

Swap traders expect the Fed to cut interest rates by about 150 basis points next year, double what the central bank has signaled, as U.S. GDP growth was revised down on Thursday to an annual rate of 4.9% in the third quarter. Personal consumption data was also weaker than economists expected.

Treasury yields and the dollar remained stable. Oil prices posted their biggest weekly gain in two months as shippers avoided the Red Sea due to increasing attacks, while Angola’s exit from OPEC after 16 years put the group’s unity in the spotlight.

The story goes on

Shares of Nike fell more than 10% in late trading after the company said it is seeking up to $2 billion in cost savings by laying off employees and simplifying the apparel giant’s product lineup amid a weaker sales outlook.

Important events this week:

  • U.S. personal income and spending, new home sales, durable goods, University of Michigan consumer sentiment index, Friday

Some of the key moves in the markets:

Shares

  • The Stoxx Europe 600 fell 0.1% at 8:18 a.m. London time

  • S&P 500 futures fell 0.2%

  • Nasdaq 100 futures fell 0.3%

  • Futures on the Dow Jones Industrial Average fell 0.4%

  • The MSCI Asia Pacific Index fell 0.3%

  • The MSCI Emerging Markets Index fell 0.6%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro remained little changed at $1.1010

  • The Japanese yen fell 0.1% to 142.33 per dollar

  • The offshore yuan was little changed at 7.1432 per dollar

  • The British pound was little changed at $1.2695

Cryptocurrencies

  • Bitcoin fell 0.7% to $43,699.65

  • Ether rose 2% to $2,293.22

Tie up

  • The yield on 10-year government bonds remained little changed at 3.89%

  • The 10-year German government bond yield rose two basis points to 1.98%

  • The yield on 10-year British government bonds was little changed at 3.53%

raw materials

  • Brent crude rose 1.1% to $80.24 a barrel

  • Spot gold rose 0.2% to $2,050.61 an ounce

This story was produced with support from Bloomberg Automation.

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