U.S. stock futures dropped after an early equity rally petered out in Asia, where volume was low as many markets across the world remain closed for the Easter holiday. The dollar edged lower and Treasury yields increased.
American shares look set to start April on the back foot after the S&P 500 Index and Dow Jones Industrial Average posted their first quarterly losses since 2015. Futures contracts for the Nasdaq 100 fell again after President Donald Trump renewed his criticism of Amazon.com Inc. over the weekend, this time tweeting that the online giant “must pay real costs (and taxes) now!” A measure of volatility rose from Friday.
Equities in Japan, China and South Korea declined during late Monday trading, reversing an earlier advance. The yen was steady as traders digested a poll showing improved support for Prime Minister Shinzo Abe’s cabinet. The South Korean won rose to its strongest against the dollar in over three years as tensions in the region showed further signs of easing. The euro was little changed and the pound pushed higher.
Investors are entering the second quarter defensively after the worst three months for global stocks in more than two years. February and March were characterized by a surge in volatility amid a barrage of concerns, from escalating trade tensions to a selloff in technology shares. Focus this week will turn to U.S. manufacturing data Tuesday and labor-market figures Friday, which are expected to show the jobless rate fell to its lowest level since 2000. Traders are also waiting for more details on American tariffs on Chinese imports.
“With interest rates still relatively low, and generating negative real returns, if you remain in cash the yield attraction of equities and the growth prospects still make it look the best alternative,” Stephen Davies, founder and CEO of Javelin Wealth Management, told Bloomberg TV on Monday.
Elsewhere, West Texas crude oil climbed above $65 per barrel after capping a third straight quarterly gain. Bitcoin rebounded back above $7,000.
Here are some key events coming up this week:
Easter Monday is a public holiday in many major markets including the U.K., Australia, Canada, and most of Europe. U.S. manufacturing PMI and ISM manufacturing data due Monday. Reserve Bank of Australia April monetary policy decision due Tuesday. New York Fed debuts the Secured Overnight Financing Rate on Tuesday. Reserve Bank of India April policy decision due Thursday. U.S. employment data due Friday; jobless rate probably fell in March after holding at 4.1 percent for five straight months.
These are the main moves in markets:
Futures on the S&P 500 Index fell 0.2 percent as of 11:35 a.m. London time. The Shanghai Composite Index dipped 0.2 percent. The MSCI Emerging Market Index gained 0.4 percent.
The Bloomberg Dollar Spot Index fell 0.1 percent. The euro rose less than 0.1 percent to $1.2328. The British pound advanced 0.3 percent to $1.4061, the first advance in a week.
The yield on 10-year Treasuries gained two basis points to 2.76 percent, the largest increase in a week.
Gold increased 0.5 percent to $1,331.88 an ounce, the biggest climb in more than a week. West Texas Intermediate crude increased 0.4 percent to $65.20 a barrel. — Bloomberg