Stocks Rebound: A Tumultuous Week Comes to a Close

Everything you need to know from this mornings market action 🐂

As the week draws to a close, the markets are experiencing a period of calm after a week of volatility. With light equity volumes and small moves across stocks, bonds, and currencies, the S&P 500 futures are indicating a 0.2% gain at the open, erasing most of the losses from Monday's market meltdown.

The rebound in US stocks was fueled by better-than-expected US jobless claims data, which helped alleviate fears of a recession. The S&P 500 has narrowed its loss for the week to just 0.5%, and investors are eagerly awaiting next week's data, which includes reports on US consumer inflation and retail sales.

European stocks are already positive on the week as investors hunted for bargains from the selloff. Treasury yields dipped and the dollar weakened, while the VIX Index hovered around 23.

In premarket trading, Expedia Group Inc. surged after posting better-than-expected second-quarter results, and Paramount Global rose as much as 7.1% after beating profit estimates.

Mixed signals from US central bank officials may prompt caution among investors. Federal Reserve Bank of Kansas City President Jeffrey Schmid indicated that he's not ready to support a reduction in interest rates with inflation above the target.

Swap traders further trimmed bets on aggressive Fed easing in 2024, with current pricing suggesting about 40 basis points of cuts for September.

The Stoxx Europe 600 index climbed 0.8%, led by real estate and miners, while Hargreaves Lansdown Plc gained after a consortium including CVC and ADIA agreed to buy the investment manager in a £5.4 billion ($6.9 billion) deal.

In Asia, the stock market rally experienced a brief pause as the yen regained some ground, temporarily halting its decline. Despite this, Japan's Topix index still managed to close with a respectable 0.9% gain, while Chinese shares stabilized after an initial surge.

The yen's resurgence is a sign of things to come, as investors continue to unwind their carry trades and cover their short positions. This trend is likely to persist, with the yen potentially reaching 100 per dollar in the long term. The market's current bearish sentiment towards the yen presents a buying opportunity, as the currency is poised for a significant upswing.

Meanwhile, oil prices held steady after Thursday's rally, as tensions in the Middle East continue to simmer. Gold, on the other hand, experienced a slight decline, but its long-term prospects remain strong.

As the markets close out a tumultuous week, investors are left to ponder the implications of the recent rebound. While there are still many uncertainties on the horizon, one thing is clear: the markets are resilient, and investors should remain cautiously optimistic about the long-term prospects of the market.

Market Moves

• S&P 500 futures rose 0.1% as of 6:17 a.m. New York time

• Nasdaq 100 futures rose 0.3%

• Futures on the Dow Jones Industrial Average were little changed

• The Stoxx Europe 600 rose 0.7%

• The MSCI World Index rose 0.2%

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro was little changed at $1.0920

• The British pound was little changed at $1.2754

• The Japanese yen was little changed at 147.17 per dollar

• Bitcoin rose 2.1% to $60,783.56

• Ether rose 3.4% to $2,657.91

• The yield on 10-year Treasuries declined three basis points to 3.96%

• Germany’s 10-year yield declined three basis points to 2.24%

• Britain’s 10-year yield declined three basis points to 3.94%

• West Texas Intermediate crude rose 0.2% to $76.32 a barrel

• Spot gold fell 0.1% to $2,424.12 an ounce