Europe Stocks Drop With U.S. Futures; Pound Gains: Markets Wrap

(Bloomberg) -- The end-of-month rebound in global equities faded as investors assessed a scaled-back fiscal stimulus proposal in the U.S. against the rising toll of the pandemic.

European share declines were led by banks and other cyclical stocks. The pound added to gains from Monday amid speculation that successful Brexit trade talks could help shield Britain from a messy rupture with the European Union. Earlier in Asia, NTT Docomo Inc. jumped after its parent offered $40 billion for the remaining shares in its wireless carrier unit.

S&P 500 futures slipped after the U.S. gauge climbed the most in more than two weeks Monday. Stocks sensitive to the pandemic fell in premarket trading including Norwegian Cruise Line Holdings and Delta Airlines Inc. With the September selloff, the index is set for its worst month relative to global peers since 2018.

As the global death toll from the pandemic exceeds one million, investors are pinning hopes on a $2.2 trillion stimulus proposal by Democrats. Volatility also surrounds the first presidential debate Tuesday, where Democratic presidential candidate Joe Biden may face tough questions on how he would approach China if he wins in November.

“We definitely need another round of stimulus here, not only for confidence for the American public and workers, but also for the markets,” Michelle Connell, owner and president of Portia Capital Management, said on Bloomberg Television. “Going into this election, that would definitely help.”

Markets are already girding for the debate, and traders have pushed up overnight implied volatilities on several major currencies including the yen against the dollar.

Here are some key events coming up:

• China purchasing manager indexes are due Wednesday, and expected to show September manufacturing improved slightly while non-manufacturing moderated from August’s level.
• The EIA crude oil inventory report comes out Wednesday.
• The September U.S. employment report on Friday will be the last before the November election.

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index declined 0.5% as of 10:48 a.m. London time.
• Futures on the S&P 500 Index decreased 0.1%.
• Nasdaq 100 Index futures dipped 0.2%.
• The MSCI Asia Pacific Index was unchanged.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.2%.
• Sterling strengthened 0.1% to 0.9083 per euro.
• The Japanese yen weakened 0.1% to 105.58 per dollar.
• South Africa’s rand weakened 0.2% to 17.0904 per dollar.

Bonds

• The yield on 10-year Treasuries fell less than one basis point to 0.65%.
• Germany’s 10-year yield decreased one basis point to -0.54%.
• Britain’s 10-year yield dipped one basis point to 0.188%.
• Italy’s 10-year yield fell three basis points to 0.854%.

Commodities

• West Texas Intermediate crude declined 0.6% to $40.34 a barrel.
• Gold strengthened 0.2% to $1,885.19 an ounce.
• Silver strengthened 0.5% to $23.78 per ounce.
• Iron ore increased 2.1% to $116.87 per metric ton.

©2020 Bloomberg L.P.