Stocks Retreat on Signs November Rally Is Overdone: Markets Wrap


(Bloomberg) — European stocks fell for a second day and US futures pointed to a weaker open on Wall Street amid signs the November rally in equities is overstretched.

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The Stoxx 600 declined 0.6%, while contracts on the S&P 500 slipped. LVMH led a retreat in European luxury stocks as HSBC Holdings Plc cut its price targets across the sector. Dutch biotech Argenx SE sank as much as 17% after preliminary results suggested its only medicine failed in a trial.

The dollar edged lower, on track for its steepest monthly drop in a year. Treasuries steadied after gains in the previous session.

Expectations that interest rates have peaked and the economy will avoid recession have spurred stocks and government bonds this month. Now, Citigroup Inc. strategists say one of the best November rallies for the S&P 500 in a century is running out of steam and net positioning in the benchmark index is looking “slightly bearish.”

Read More: Citi’s Montagu Says Sharp US Stock Rally Is Running Out of Steam

Central bankers from Australia, England and Thailand, meanwhile, warned that the monetary policy outlook remains uncertain. The European Central Bank isn’t yet at a point where it should consider reducing borrowing costs, Bundesbank President Joachim Nagel said.

“US markets seem to be taking a breather post-Thanksgiving so you get a bit of weakness in Europe too,” said Kamil Dimmich, partner at North of South Capital in London.

Traders will be watching a series of speeches by Federal Reserve officials on Tuesday and another batch of economic data are due this week, including the Fed’s preferred measure of underlying inflation.

Elsewhere, gold was little changed, hovering near the highest level since May. Oil snapped three days of declines as the market weighed the possibility of deeper output cuts from OPEC+.

Key events this week:

  • Meeting of NATO foreign ministers in Brussels, Tuesday-Wednesday

  • ECB governing council member Pablo Hernandez de Cos and Bank of England Deputy Governor Dave Ramsden speak, Tuesday

  • US Conference Board consumer confidence, Tuesday

  • Fed Governor Chris Waller speaks, Chicago Fed President Austan Goolsbee speak, Tuesday

  • New Zealand rate decision, Wednesday

  • OECD releases biannual economic outlook, Wednesday

  • Eurozone economic confidence, consumer confidence, Wednesday

  • Bank of England Governor Andrew Bailey speaks, Wednesday

  • US wholesale inventories, GDP, Wednesday

  • Cleveland Fed President Loretta Mester speaks, Wednesday

  • Fed releases its Beige Book, Wednesday

  • China non-manufacturing PMI, manufacturing PMI, Thursday

  • OPEC+ meeting, Thursday

  • Eurozone CPI, unemployment, Thursday

  • US personal income, PCE deflator, initial jobless claims, pending home sales, Thursday

  • China Caixin Manufacturing PMI, Friday

  • Eurozone S&P Global Manufacturing PMI, Friday

  • US construction spending, ISM Manufacturing, Friday

  • Fed Chair Jerome Powell to participate in “fireside chat” in Atlanta, Friday

  • Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 fell 0.6% as of 11:22 a.m. London time

  • S&P 500 futures were little changed

  • Nasdaq 100 futures were little changed

  • Futures on the Dow Jones Industrial Average were little changed

  • The MSCI Asia Pacific Index rose 0.2%

  • The MSCI Emerging Markets Index rose 0.5%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0955

  • The Japanese yen was little changed at 148.61 per dollar

  • The offshore yuan was little changed at 7.1607 per dollar

  • The British pound was little changed at $1.2634

Cryptocurrencies

  • Bitcoin rose 0.4% to $37,168.44

  • Ether rose 0.4% to $2,023.37

Bonds

  • The yield on 10-year Treasuries advanced one basis point to 4.40%

  • Germany’s 10-year yield was little changed at 2.55%

  • Britain’s 10-year yield was little changed at 4.22%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Tassia Sipahutar.

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