(Bloomberg) — US equity futures struggled for direction, ceding brief gains sparked by China’s monetary-policy shift, as investors focused on an upsurge in geopolitical risk and the outlook for interest-rate cuts in the US and other major economies.
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Contracts on the Nasdaq 100 eased 0.2% and those on the S&P 500 slipped 0.1%, after rising earlier following China’s announcement that authorities will embrace a “moderately loose” strategy next year. More steps on the fiscal side could be unveiled at Wednesday’s Central Economic Work Conference. While Beijing’s pledge boosted Asian markets and supported US-listed Chinese shares in premarket trading, gains elsewhere were short-lived.
Europe’s Stoxx 600 benchmark also handed back a rise, though sectors exposed to China, including miners and consumer products, advanced.
“The somewhat looser monetary policy stance by the Politburo is welcome news, though it won’t materially change the situation for the Chinese economy,” said Joachim Klement, head of strategy, economics and ESG at Panmure Liberum. “What is needed is substantially more fiscal stimulus that is supported by a looser monetary policy.”
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Crude oil as well as gold prices rose after the toppling of Bashar al-Assad’s regime in Syria unsettled an already restive Middle East. South Korea also risks prolonged political impasse, with opposition lawmakers pushing for another impeachment vote on President Yoon Suk Yeol. That saw Korean markets extending declines, while the won fell about 1% against the dollar.
Absent further geopolitical escalation, investors will turn their attention to this week’s central bank meetings. The European Central Bank, meeting for the first time since the collapse of governments in Paris and Berlin, is expected to cut interest rates, as are the Bank of Canada and the Swiss National Bank. Australia’s central bank will likely keep rates on hold.
US inflation data will be another key event, potentially determining whether the Federal Reserve eases policy again at its Dec. 18 meeting. While the November jobs report indicated on Friday that the labor market is cooling enough to allow a rate cut, the inflation print could heighten uncertainty, should it show price pressures accelerating last month by more than the 0.3% forecast in a survey.
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2024-12-09 06:11:59
