US stock futures fall

(Bloomberg) — U.S. stocks are poised to extend their retreat as Treasury yields near their highest levels this year, fueling concerns about tighter monetary policy.

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Futures for the S&P 500 fell 0.4%, marking a second day of declines. Salesforce Inc fell 17% in premarket trade as sales growth slowed. Europe’s Stoxx 600 benchmark was led by telecom and banking stocks. Ten-year Treasury yields were steady after rising about 15 basis points in the past two days.

The rest of the data this week will be important as investors refine their monetary policy outlook: U.S. GDP numbers will be released later Thursday, which will be lower than early prints, and inflation reports from the U.S. and Europe are due Friday.

Global stock markets headed for their worst week since mid-April as U.S. rate cut expectations faded and tepid U.S. bids fueled concerns about financing the U.S. deficit.

BlackRock International Ltd is sticking to the front end and belly of the US Treasuries curve, according to Karim Sedit, head of investment strategy for EMEA.

“In terms of returns to stability, we see it as the area where you’re still making the most money,” he said in an interview with Bloomberg Television.

A fiery rally in tech companies is underpinned by fundamentals, with BlackRock among its “key sector overweights,” Chedid says, adding that he sees increased inflows in European and Japanese stocks.

The prospect of an interest rate cut at the European Central Bank’s June meeting is helping, Cedit said, adding that “the macro data in Europe is bottoming out, which investors want.” “Earnings in Europe have seen significant improvement over the past 12 months.”

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Rand slides

Elsewhere, the rand extended losses and bank shares fell as South Africa’s election turnout rose. For the first time since the ruling party came to power, it has not been able to get a parliamentary majority.

South Africa’s ANC may lose national majority, model shows

In commodities, crude fell as traders looked to U.S. stockpiles data and the OPEC+ meeting at the weekend for further clarity on the supply and demand outlook.

Company Highlights:

  • Goldman Sachs analysts initiated coverage on six large-cap drug stocks on Thursday. They gave buy ratings to AstraZeneca Plc, Novo Nordisk A/S and Novartis AG, and are neutral on GSK Plc and Bayer AG. Roche Holding AG is their only sell rating.

  • China is poised to impose a record fine on PricewaterhouseCoopers LLP and suspend some local operations of the global auditor over its role in one of the country’s biggest financial fraud cases.

  • Luxury sneaker brand Golden Goose Group Spa launches a Milan initial public offering, Italy’s largest listing in a year.

  • Saudi Arabia is preparing to formally launch a secondary stake in oil major Aramco as soon as Sunday, a deal that could raise more than $10 billion and would be the largest of its kind in recent years.

  • Brookfield is in exclusive talks to buy a majority stake in Neoen SA in the French renewable energy developer valued at around €6.1 billion.

Highlights of this week:

  • US Initial Jobless Claims, GDP, Thursday

  • The Fed’s John Williams and Lori Logan speak Thursday

  • Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday

  • China’s official manufacturing and non-manufacturing PMI, Friday

  • Eurozone CBI, Friday

  • US consumer income, spending, PCE deflator, Friday

  • The Fed’s Raphael Bostic speaks on Friday

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Some key movements in the markets:

Shares

  • S&P 500 futures were down 0.4% at 7:15 a.m. New York time

  • Nasdaq 100 futures fell 0.3%

  • Futures for the Dow Jones industrial average fell 0.9%

  • The Stoxx Europe 600 rose 0.3%

  • The MSCI World Index was little changed

Coins

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was up 0.1% at $1.0815

  • The British pound was up 0.1% at $1.2715

  • The Japanese yen rose 0.5% to 156.88 per dollar

Cryptocurrencies

  • Bitcoin rose 0.7% to $67,912.57

  • Ether was little changed at $3,746.59

Bonds

  • The yield on 10-year Treasuries fell two basis points to 4.59%.

  • Germany’s 10-year yield fell one basis point to 2.68%.

  • Britain’s 10-year yield fell two basis points to 4.38%.

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This story was produced with the help of Bloomberg Automation.

–With assistance from Masaki Kondo and Chiranjeevi Chakraborty.

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