U.S. stock futures rose again on Friday, setting Wall Street for its first weekly gain in a month, even as markets around the world continue to suggest growth worries have overtaken inflation worries. approaching the second half of the year.
Federal Reserve Chairman Jerome Powell told congressional lawmakers on Capitol Hill yesterday that he and his colleagues ‘cannot fail’ in their efforts to bring inflation back to the 2% level needed for price stability. in the world’s largest economy, a reiteration that points to more Fed rate hikes and slower economic growth.
“We really need to restore price stability,” Powell told the House Financial Services Committee. “Because without that we can’t have an extended period of maximum employment where the benefits are very widely distributed. It’s something we have to do, we have to do it.”
Commodity prices, which have weakened for much of the past two weeks, extended the decline in overnight trade, with copper – a closely watched barometer of manufacturing demand – on pace in its worst week ever. two years and oil prices hovering near the lowest levels since early May.
Bond yields are also recovering, leading yields on benchmark 10-year Treasury bonds to fall to 3.119% in overnight trading, putting the spread over 2-year Treasury bonds at just 6 basis points. base. A so-called reversal in 2- and 10-year bond yields is widely seen as a near-term recession signal following weaker-than-expected PMI data from the world’s major economies.
“Overall, the PMI releases have put more emphasis on the slowdown/recession in inflation, and that should show more in the coming weeks,” said Peter Garnry, head of equity strategy at SaxoBank. “
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Investors are also withdrawing money from stock markets at the fastest rate in more than two months, according to data from Bank of America’s weekly “Flow Show” report, which shows stock market withdrawals of about 16.8 billion.
Yet global equity indices are trending higher, buoyed by defensive and growth stocks, the former enjoying support from investors worried about the risk of recession, the latter benefiting from falling Treasury yields.
In Europe, the region-wide Stoxx 600 rose 1.6% at midday in Frankfurt, on pace with a weekly gain of around 1%, while the Asian benchmark MSCI ex-Japan gained 1.4% to put its weekly lead at around 1.34%.
On Wall Street, futures tied to the Dow Jones Industrial Average point to an opening bell gain of 240 points while those tied to the S&P 500, which is down 20.36% for the year, are priced for a gain of 32 points. Tech-focused Nasdaq-linked futures are eyeing an opening bell gain of 120 points.
Bank stocks were on the move, rising slightly across the board, after the Federal Reserve said Thursday night that all of the nation’s biggest banks could take a severe shock to the US economy in an assessment that will see them rise. increase shareholder returns over the coming year.
Wells Fargo (WFC) – Get the Wells Fargo & Company report shares rose 1.2% in premarket trading on Friday to point to an opening price of $38.35 each. JP Morgan (JPM) – Get the JP Morgan Chase & Co. report. rose 0.4% to $113.92 while Bank of America gained 0.4% to $32.21 apiece.
fedex (FDX) – Get the FedEx Corporation report Shares, meanwhile, rose 2.9% after the world’s largest parcel delivery group posted better-than-expected fourth-quarter earnings, alongside strong near-term earnings expectations.