The world’s largest stock markets were mixed overnight, with European stocks mostly gaining and Asian shares mostly falling.
At the start of the New York trading day session, U.S. market indexes are heading for higher openings. On Thursday, the S&P 500 stock index reached its lowest point in almost two years.
As central banks’ attempts to control inflation through tighter monetary policy weighed on share prices, US stocks were on track for their longest streak of quarterly losses since the 2008 financial crisis.
After a turbulent week in which the Bank of England intervened to quell turbulence in the UK government debt market, stocks advanced in early afternoon European trade on Friday.
London’s FTSE 100 rose by 0.1%, while the regional Stoxx Europe 600 index increased by 0.4%. The S&P 500 index on Wall Street increased 0.2% as an outcome of futures contracts.
While central banks stated that they would keep rising interest rates while reducing support for their economies in an effort to manage inflation, the gains accomplished little to turn around a bad spell for stock markets.
The broad S&P gauge, which was down 3.8% for the three months through September 30 before the New York open, was poised to complete a third consecutive quarter of declines on Friday.
Emmanuel Cau, head of European equity strategy at Barclays, said, “Central bankers are telling us that they are going to tame inflation, that it is going to come at expense of the economy, and we don’t care about markets right now.” “I suspect you can see the market bounce on the end of the month on the lack of back news,” Cau added.
Bond prices have stabilized after the Bank of England announced a new program to buy long-term debt this week in order to calm the gilt market, which had been concerned about the UK government’s plans to borrow more money to pay for tax cuts.
After climbing above 4% on Wednesday for the first time since 2010, the yield on the benchmark 10-year US Treasury note fell 0.05 percentage points to sit at roughly 3.7%. Yields increase when prices decline.
The yield on the 10-year note dropped by 0.08 percentage points to 4.06 percent, while the yield on the policy-sensitive two-year note decreased by 0.13 points to 4.23 percent.
UK yields have recently moved by historically large amounts across all maturities, with the 10-year increasing by more than 0.4 percentage points on Monday before falling by about 0.5 percentage points on Wednesday.
Cau stated that central bankers had worked hard to explain to the market that the BoE’s move should not be interpreted as the start of a more comprehensive return to supportive policy. “The [Federal Reserve] is going to stick to its plan and has been very clear that what the BoE is doing should be regarded as separate. The European Central Bank is taking similar steps,” Cau added.
The S&P 500 dropped 2.1% on Thursday, which was a bad day for Wall Street. The Nasdaq Composite, which has a significant tech component, dropped 2.8% after Bank of America changed its recommendation for tech giant Apple from “buy” to “neutral.”
The downgrade, which cited projections of reduced consumer demand for the manufacturer of the iPhone’s primary product, caused Apple’s stock to tumble by 4.9%.
As US tech stocks fell, so did Asian stocks. On Friday, the Topix index fell 1.8% in Japan. Shanghai and Shenzhen-listed shares in China’s CSI 300 index fell 0.6%, while the Hang Seng in Hong Kong improved by 0.3%.