Stocks Mixed After Fed With Apple Results in Focus: Markets Wrap

(Bloomberg) — Stock futures traded mixed on Thursday and Treasury yields edged lower after Federal Reserve Chair Jerome Powell downplayed the prospect of further interest-rate hikes. The yen resumed losses after a sudden jump hinted at intervention.

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European equity contracts were little changed while US futures on the S&P 500 advanced. Bloomberg’s index of the dollar fell for a second day, reflecting the drop in US yields following the Fed’s decision. With that out of the way, traders are looking to other catalysts, such as euro-area manufacturing data and Apple Inc.’s quarterly results later on Thursday.

The Fed downplayed the potential for imminent rate hikes as officials unanimously decided to leave the target range for the benchmark federal funds rate at 5.25% to 5.5% following a slew of data that pointed to sticky inflation pressures. Powell said it’s unlikely the central bank’s next move would be to raise rates, saying authorities would need to see persuasive evidence that policy isn’t tight enough to bring inflation back toward the 2% target.

“The bar was set high for a hawkish surprise last night” and the Fed “did not attempt to leap it,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne.

Further insight into the health of the US economy will come from April non-farm payrolls data due Friday. A Bloomberg Economics model points to an unchanged unemployment rate of 3.8%. That suggests “hiring likely remains too hot for the Fed,” economists Andrej Sokol and Scott Johnson wrote in a note.

In corporate news, Shell Plc announced a $3.5 billion share buyback and reported profit that beat estimates. ArcelorMittal SA, the world’s biggest steelmaker outside China, also posted earnings that exceeded projections. Apple’s figures due after the US market closes will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market.

“Earnings are looking quite resilient, quite constructive on the equities side,” John Woods, CIO for Asia Pacific at Lombard Odier, said in an interview on Bloomberg Television. “It’s overwhelmingly a US story for now.”

Yen Slide

The yen slid as much as 1.1% against the dollar, after having surged late Wednesday in New York. The renewed decline suggests investors are skeptical that Japanese authorities will be able to prevent the currency from weakening, given the country’s wide interest-rate differential with the US. Japan’s top currency official, Masato Kanda, said he had nothing to say when asked if officials had intervened.

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In commodities, oil clawed back losses from Wednesday. Gold advanced.

Key events this week:

• Eurozone S&P Global Manufacturing PMI, Thursday

• US factory orders, initial jobless claims, trade, Thursday

• Apple earnings, Thursday

• Eurozone unemployment, Friday

• US unemployment, nonfarm payrolls, ISM Services, Friday

• Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.5% as of 7:12 a.m. London time

• Nasdaq 100 futures rose 0.6%

• Futures on the Dow Jones Industrial Average rose 0.4%

• The MSCI Asia Pacific Index rose 0.9%

• The MSCI Emerging Markets Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%

• The euro was little changed at $1.0719

• The Japanese yen fell 0.5% to 155.41 per dollar

• The offshore yuan was little changed at 7.2323 per dollar

• The British pound was little changed at $1.2539

Cryptocurrencies

• Bitcoin rose 0.4% to $57,520.45

• Ether fell 0.7% to $2,916.21

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.61%

• Germany’s 10-year yield advanced five basis points to 2.58%

• Britain’s 10-year yield advanced two basis points to 4.37%

Commodities

• Brent crude rose 0.7% to $84.03 a barrel

• Spot gold fell 0.2% to $2,315.71 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu and Richard Henderson.

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