Check back here all day with live updates.
U.S. equity futures bounced higher Friday as an extended pullback in Treasury bond yields put the major indices on pace for their third consecutive weekly gain and the longest winning streak since July.
Stocks have been closely tracking Treasury bond yields for much of the past few months, and even more so of late now that traders have essentially abandoned bets on a final Federal Reserve rate hike and booked in cuts of around 1% for next year amid a predicted economic slowdown.
Those forecasts have pulled benchmark 10-year note yields more than 60 basis points from the 2007 peak levels reached last month, with the paper trading at 4.395% heading into the early Friday session.
At the same time, 2-year notes were marked at 4.813%, around 30 basis below late October levels, while the U.S. dollar index fell another 0.16% against a basket of its global peers to an early September low of 104.191.
The extended moves lower in yields have powered solid gains for stocks, with the S&P 500 rising more than 10% from its late October lows to sit just 2% south of its 52-week high.
Earnings optimism, underlying economic strength and a job market that, while weakening, is still producing robust monthly additions with muted wage growth.
That’s helped plough more than $23.5 billion into equity funds over the past week, according to Bank of America’s closely-tracked ‘Flow Show’ report, and could set up a bullish near-term backdrop for stocks heading into the final weeks of the year.
On Wall Street, futures contracts linked to the S&P 500 are priced for a modest 11 point opening bell gain while those linked to the Dow Jones Industrial Average are indicating a 105 point advance. The tech-focused Nasdaq is likely to open 10 points higher last night’s closing levels.
In other markets, global oil prices rebounded from their worst single-day decline in four months yesterday, as crude slumped into a bear market – defined as a 20% fall from a recent high – amid concerns over the fate of global demand heading into next year and the ongoing supply gut from a surge in U.S. production.
Brent crude contacts for January delivery, the global pricing benchmark, were last seen trading 74 cents higher at $78.16 per barrel while WTI crude contracts for December, which are tightly-linked to domestic gas prices, added 75 cents to trade at $73.65 per barrel
In Europe, stocks are on pace for a solid 2.7% gain amid a better-than-expected third quarter earnings season and bets on 2024 rate cuts from the European Central Bank. The region-wide Stoxx 600 index was marked 1.07% higher in early Frankfurt trading while Britain’s FTSE 100 gained 1.03% in London.
Overnight in Asia, a steep decline for Alibaba BABA, which dumped plans to spin-off its cloud division amid the ongoing ban on U.S. chip exports, pulled China and Hong Kong stocks lower and left the MSCI Asia ex-Japan index 0.48% lower into the final hours of trading.
Japan’s Nikkei 225, meanwhile, closed 0.48% higher, ending the week at a four-month peak of 33,585.20 points.
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
