Tesla Climbs on GM Pact; US Stock Futures Drift: Markets Wrap

US stock futures indicated a pause after the S&P 500’s rally to a bull market, while the dollar headed for its biggest weekly loss in a month on bets that the Federal Reserve is nearing the end of its hiking cycle.

(Bloomberg) — US stock futures indicated a pause after the S&P 500’s rally to a bull market, while the dollar headed for its biggest weekly loss in a month on bets that the Federal Reserve is nearing the end of its hiking cycle.

Tesla Inc. shares jumped 4.5% in pre-market trading and was on track to rise for an 11th straight session as General Motors Co. announced it’s joining the company’s charging network. GM advanced 3.5%. Target Corp. shares retreated 1.3% after Citigroup Inc. analysts cut their rating, citing slower foot traffic and tough competition. 

Investors may be reluctant to take big positions ahead of next week’s interest-rate decisions from the Fed and the European Central Bank. Unexpected hikes from two central banks this week have raised speculation that policymakers may have to keep interest rates higher for longer. Meanwhile, US data pointing to a cooling labor market has supported the consensus view that the Fed is likely to pause.  

“The backdrop of late has been one of heightened macro uncertainty, but with inflation still running uncomfortably high,” ING rates strategists led by Benjamin Schroeder wrote in a note. “Our house view is that the Fed is already at its peak policy rate, though with the caveat that a higher CPI reading could still eke out a hike next week. In any case, the Fed is likely to leave the door open to more.”

Read More: S&P 500’s Journey to Bull Market Bypasses Recession Warnings

Treasury yields ticked higher on Friday, with the 10-year rate at 3.75%. Currently, swaps traders have priced in roughly a one-third chance of a Fed hike next week, and almost 90% odds of one in July.

Elsewhere, Japanese shares continued their unstoppable rally. The Nikkei 225 jumped 2.4% this week, capping a ninth week of gains and the longest streak in more than five years. European stocks retreated, with a downbeat outlook from Croda International Plc weighing on chemical shares.

In currencies, Turkish lira extended its decline to an all-time low against the dollar, taking its weekly drop to 11%. President Recep Tayyip Erdogan completed key appointments of the economy team, which is expected to turn to more conventional policies.

 

Stocks

  • S&P 500 futures fell 0.1% as of 7:17 p.m. Tokyo time
  • Hang Seng futures rose 0.6%
  • S&P/ASX 200 futures rose 0.3%
  • Euro Stoxx 50 futures fell 0.4%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.2% to $1.0760
  • The Japanese yen fell 0.4% to 139.53 per dollar
  • The offshore yuan fell 0.3% to 7.1430 per dollar

Cryptocurrencies

  • Bitcoin was little changed at $26,639.77
  • Ether fell 0.5% to $1,844

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 3.74%
  • Australia’s 10-year yield declined six basis points to 3.95%

Commodities

  • West Texas Intermediate crude rose 0.3% to $71.17 a barrel
  • Spot gold fell 0.1% to $1,963.39 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rob Verdonck and Richard Henderson.

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