Stock futures pare gains while crude tops $110: markets wrap

Brent oil was near $110 a barrel and a commodity index jumped the most since 2009 to a record.
Image: Kiyoshi Ota/Bloomberg

Stock futures clung to small gains after two days of selling as traders assessed comments from Jerome Powell on the Federal Reserve’s policy intentions. Treasuries fell, while oil topped $110 a barrel.

S&P 500 contracts pared their advance, while 10-year yields halted a four day slide. “With inflation well above 2% and a strong labour market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” Powell said Wednesday in remarks prepared for his appearance before the House Financial Services Committee at 10 a.m. in Washington.

US companies in February added more jobs than forecast as Covid-19 cases dropped and restrictions eased, encouraging more Americans to work. The data precede Friday’s monthly employment report from the Labor Department, which is currently forecast to show that private payrolls increased by 383,000 in February.

Global commodity markets surged to multiyear highs after traders backed away from Russia, sparking anxiety that supply will fall short in everything from wheat to natural gas. Oil passed $110 a barrel, aluminium hit a fresh record and wheat rose to the highest since 2008. In Europe, natural gas prices and coal set all time highs, deepening the region’s energy crisis. OPEC and its allies agreed another modest revival in supplies for April at a low-key meeting that was overshadowed by the market turmoil unleashed by Russia’s invasion of Ukraine.

Sell-side analysts in the US are getting more nervous about earnings forecasts, with profit revisions turning most negative since May 2020. Downgrades are now outweighing upgrades as the war in Ukraine, rising oil prices and policy tightening may weigh on economic growth.

What to watch this week:

  • ECB publishes the account of its February meeting, Thursday
  • Eurozone Markit services PMI, PPI, unemployment, Thursday
  • US factory orders, initial jobless claims, U.S. durable goods, Thursday
  • US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 0.3% as of 8:52 a.m. New York time
  • Futures on the Nasdaq 100 rose 0.2%
  • Futures on the Dow Jones Industrial Average rose 0.3%
  • The Stoxx Europe 600 rose 0.2%
  • The MSCI World index fell 0.3%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%
  • The euro fell 0.2% to $1.1103
  • The British pound was little changed at $1.3337
  • The Japanese yen fell 0.4% to 115.38 per dollar

Bonds

  • The yield on 10-year Treasuries advanced four basis points to 1.76%
  • Germany’s 10-year yield advanced six basis points to -0.01%
  • Britain’s 10-year yield advanced eight basis points to 1.21%

Commodities

  • West Texas Intermediate crude rose 7.3% to $111.01 a barrel
  • Gold futures fell 0.5% to $1,934.40 an ounce
© 2022 Bloomberg

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