U.S. Futures, Asia Stocks Fluctuate on Bond Rout

10/01/2022 Stocks in Asia traded cautiously earlier as investors brace for bond-market volatility and stimulus withdrawal. Shares in Hong Kong advanced as technology stocks rebounded. They fell in South Korea, while China edged higher. U.S. futures swung between gains and losses after the S&P 500 posted the worst start to a year since 2016 as expectations of faster-than-anticipated U.S. interest-rate increases roiled bond markets. The tech-heavy Nasdaq 100 had its worst week since February amid a rotation out of high-growth equities. Japan is shut for a holiday today. Elsewhere, Bitcoin traded around $42,000 as cryptocurrencies continue to struggle. Crude oil steadied around $79 a barrel after recording the biggest weekly gain in a month.

Locally the JSE Top 40 closed down 0.25% on Friday gaining 0.33% for the week in which just R 28.5 bln traded all week, let’s hope we start seeing a bit more activity as holidays draw to an end. The Rand capped it’s best week in four months to trade close to R 15.50 as US jobs data missed on Friday. We should see a firmer start with Tencent up 2.48 % and IG Top 40 up 180 points.

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Here are some key events this week:

• Atlanta Fed President Raphael Bostic discusses the economic outlook Monday
• Fed Chair Jerome Powell’s confirmation hearing in the Senate Banking Committee. Tuesday
• Kansas City Fed President Esther George, St. Louis Fed President James Bullard discuss economy and monetary policy Tuesday
• Wednesday: EIA crude oil inventory report; China PPI, CPI
• U.S. CPI Wednesday
• U.S. Senate Banking Committee hearing for Lael Brainard, nominated as Fed vice-chair. Thursday
• Richmond Fed President Thomas Barkin; Philadelphia Fed President Patrick Harker; Chicago Fed President Charles Evans on economy and monetary policy. Thursday
• Bank of Korea policy decision, briefing Friday
• Earnings 4Q: Wells Fargo, Citigroup, JPMorgan. Friday
• New York Fed President John Williams speaks Friday.

The pan-European Stoxx 600 ended down 0.5%, with most sectors in negative territory and major bourses pointing in opposite directions. It comes after inflation in the euro zone hit a new record high in December, raising more questions about the European Central Bank’s policy. Preliminary data showed Friday that headline inflation came in at 5% for the month, compared to the same month last year. The figure represents the highest ever on record and follows November’s all-time high of 4.9%. Travel and leisure was the worst-performing sector, down by 1.6%. Basic resources, on the other hand, was the top performer, up almost 1.9%. Futures this morning are mixed with the FTSE up 0.25% , the DAX up 0.17% and the CAC down 0.41%.
In the US, the three major stock averages all fell in the first week of the year. The S&P 500 slid 0.4% on Friday for its first four-day losing streak since September. The Nasdaq dropped 0.9%, also posting four straight losing days. The Dow Jones Industrial Average lost 4.81 points.