Stocks fall as US oil gains on China hopes

By | November 29, 2022

  • Wall Street stocks, MSCI global index in red
  • Oil prices rebound on China hopes
  • Dollar advances little in unstable session
  • 10-year US Treasury yields rise

NEW YORK/LONDON, Nov 29 (Reuters) – Wall Street lost ground on Tuesday as investors awaited guidance on an interest rate hike from the Federal Reserve, while U.S. crude futures closed at high on hopes that China will ease COVID-19 restrictions that have stoked fears about the world economy.

The Aussie Dollar rebounded on Tuesday as investors expected China to ease COVID restrictions after Chinese health officials discussed accelerating COVID vaccinations for seniors. The yen strengthened against the dollar and the euro lost ground.

Trading in U.S. Treasuries was choppy ahead of a series of data releases later in the week and after a survey released on Tuesday showed U.S. consumer confidence fell further in November amid to lingering concerns about the rising cost of living.

Federal Reserve Bank of Richmond President Thomas Barkin on Monday dismissed speculation that the US central bank would reverse course in interest rates relatively quickly next year in comments made late on Monday.

After similar messages from other Fed officials on Monday, investors were cautiously awaiting Wednesday’s appearance from Fed Chairman Jerome Powell, who earlier this month had dashed hopes of policy easing when he spoke to reporters after a Fed meeting.

“Investors rarely hedge against what could be an aggressive reiteration of their comment at the press conference. That could throw some cold water on recent market rallies,” said Mark Luschini, chief investment strategist at Janney Montgomery. Scott in Philadelphia.

However, weakening consumer confidence may have marginally helped to soften Treasury yields, weaken the dollar and boost equities, as investors saw this as “ammunition for the Fed to soften its hawkish momentum”, the strategist added.

The Dow Jones Industrial Average (.DJI) was down 50.35 points, or 0.15%, to 33,799.11, the S&P 500 (.SPX) lost 12.5 points, or 0.32%, to 3,951.44 and the Nasdaq Composite (.IXIC) was down 79.10 points, or 0.72%, to 10,970.40.

The pan-European STOXX 600 Index (.STOXX) closed down 0.13%, while MSCI’s Worldwide Equity Gauge (.MIWD00000PUS) was down 0.09%.

US Treasury yields rose in choppy trading as traders waited for upcoming data including third-quarter US gross domestic product (GDP) data, Chicago manufacturing numbers, manufacturing activity based on the Institute for Supply Management and Nonfarm Payrolls for November, scheduled for Friday.

Benchmark 10-year notes rose 4.4 basis points to 3.746% from 3.702% late on Monday. The 30-year bond rose 5.4 basis points to yield 3.8032% from 3.749%. The latest 2-year note rose 0.2 basis points to yield 4.4732% from 4.471%.

“It will be a busy second half of the week with all the data we expect. But the main focus will be on inflation and jobs,” said Subadra Rajappa, head of US rate strategy at Société Générale in New York. 🇧🇷

The dollar index was up 0.188%, with the euro down 0.12% to hit $1.0325.

The Japanese yen strengthened 0.22% against the dollar at 138.63 to the dollar, while the British pound traded at USD1.1951, down 0.06% on the day.

The Aussie was up 0.53% against the greenback after rising as much as 1.4%.

Oil prices rose on hopes of a relaxation of China’s strict COVID-19 controls, which have stoked demand concerns.

US crude futures closed up 1.24% at $78.20 a barrel, while Brent closed at $83.03, down 0.2%.

Gold prices rose on the back of the dollar’s retreat and hopes for less aggressive US rate hikes going forward.

Spot gold rose 0.5% to $1,750.10 an ounce. US gold futures were up 0.50% to settle at $1,749.00 an ounce.

Reporting by Sinéad Carew, Gertrude Chavez-Dreyfuss in New York, Tom Wilson in London and Wayne Cole in Sydney; Edited by Susan Fenton, Lisa Shumaker and Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *