Stocks fell with U.S. futures on Monday as China’s widening technology-sector crackdown weighed on risk sentiment ahead of a busy week of earnings and policy updates.
Shares in China and Hong Kong tumbled, led by a selloff in education tech companies in the wake of Beijing’s sweeping reforms of the $100 billion industry. European equities were lower, dragged by carmakers and media shares.
S&P 500 contracts slipped following a record close for the underlying gauge Friday, while Nasdaq 100 futures were little changed. Treasuries pushed higher, with traders bracing for possible turbulence from a Federal Reserve meeting this week where officials are due to discuss the outlook for stimulus.
While investors have cheered the positive earnings season so far, concerns linger about inflation and the threat to economic growth from the rising delta virus variant. That has weighed on value stocks, while growth peers are outperforming. A slew of earnings from Wall Street giants such as Apple Inc. and Tesla Inc. this week may prove a further catalyst to the relative trade.
The outlook for the Fed’s $120 billion in monthly bond purchases also remains key: economists surveyed by Bloomberg expect the central bank to start scaling back asset purchases next year and to raise interest rates at a quicker pace through 2024 than previously thought.
“The second half of the year is going to be this glass half-full, half-empty context” spanning monetary and fiscal support and good earnings but also concern about the virus, Virginie Maisonneuve, Allianz Global Investors global chief investment officer for equities, said on Bloomberg Television.
U.S.-China tension is on the radar too. China lashed out at U.S. policies in a tense start to high-level talks in Tianjin, declaring the relationship between the world’s two largest economies in a “stalemate.”
Elsewhere, Bitcoin jumped toward $40,000, continuing a recent rally. Crude oil declined below $72 a barrel.
The Japanese yen outperformed in the Group-of-10 currencies amid a mood of caution.
Here are some key events to watch this week:
Tesla, Alphabet, Apple, Facebook, Amazon report earnings this weekFederal Reserve policy meeting concludes WednesdayU.S. GDP data are due Thursday
These are some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.3% as of 8:18 a.m. London timeFutures on the S&P 500 fell 0.3%Futures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average fell 0.4%The MSCI Asia Pacific Index fell 0.9%The MSCI Emerging Markets Index fell 1.9%
Currencies
The Bloomberg Dollar Spot Index was little changedThe euro rose 0.2% to $1.1789The Japanese yen rose 0.3% to 110.22 per dollarThe offshore yuan fell 0.2% to 6.4882 per dollarThe British pound was little changed at $1.3759
Bonds
The yield on 10-year Treasuries declined four basis points to 1.24%Germany’s 10-year yield declined one basis point to -0.43%Britain’s 10-year yield declined three basis points to 0.55%
Commodities
Brent crude fell 1% to $73.35 a barrelSpot gold rose 0.3% to $1,808.20 an ounce
