 "Wall Street")
US equity futures faltered, struggling to hold the momentum that propelled the S&P 500 to its best daily gain in three weeks, as investors assessed whether the world’s biggest economy can skirt worst-case recession scenarios.
Futures contracts on the S&P 500 and the Nasdaq 100 index flat-lined after Wednesday’s 1.5 per cent boost for the underlying indices on data showing US consumer confidence at an eight-month high and a further decline in inflation expectations.
The figures came a day after sportswear maker Nike and delivery firm Fedex, often seen as a bellwether for the economy, posted forecast-topping estimates, showing consumers are still making discretionary purchases. However, the mood was dampened by memory chipmaker Micron, whose gloomy outlook knocked its shares in US premarket trading and weighed on other chip firms.
European semiconductor shares also fell, erasing earlier gains on the Stoxx 600 gauge, though it remains set to break a two-week losing spell. The S&P 500’s large decline this month contrasts with an average 1.5 per cent December gain since 1950, providing sidelined global investors with plenty of “dry powder” to put to work, according to SEB.
“The resilience of the US economy thus continues to impress, and the probability is turned up a mini step for a soft landing,” Stockholm-based analysts at the firm told clients. On the other hand, war, inflation, and monetary policy tightening are pressuring companies’ large order books and profitability, they added.
Meanwhile, bond traders continued testing the Bank of Japan’s new 0.5 per cent yield limit, and the central bank conducted an additional debt-purchase operation, pushing yields down to about 0.385 per cent. However, 10-year borrowing costs are on course for their biggest weekly jump since 2015.
Yields on treasuries and euro zone bonds slipped but concerns remain that Japanese investors could now be persuaded to bring home some of the trillions of dollars they have stashed in foreign stocks and bonds.
