US stock market expected to open higher after Friday’s drop
U.S. stock market futures indicate a partial recovery ahead on Monday from the worst day for U.S. stocks in months, when Dow industrials suffered their worst fall since October 2020 on Friday and the S&P 500 had the more slipped since February.
In Asia, Tokyo
fell 3.29%, while that of Hong Kong
fell 1.08%. the
increased by 0.12%. the
in London rose 0.3% while the pan-European Stoxx 600 was up 0.3%. the
in Paris rose by 0.2% and that of Frankfurt
increased by 0.5%. The US pre-market looked poised for a strong open, with Dow industrials futures pointing to 180 points, after the index fell 533 points to close at 33,290 on Friday.
Stocks suffered late last week, after the US Federal Reserve said it would start raising interest rates earlier than expected, with two hikes slated for 2023. The Federal Reserve Chairman of St. Louis, James Bullard, said Friday he sees a first rate hike in 2022.
Investor reaction continued on Monday, with Asian stocks in the spotlight as Japan’s key index fell.
âAsian markets collapsed sharply as investors continued to respond to last week’s US Federal Reserve meeting which dampened sentiment by raising the prospect of an earlier-than-expected rate hike,â said Russ Mold, analyst at AJ Bell.
Deutsche Bank strategist George Saravelos said the markets “don’t look very healthy” after the Fed meeting last week.
Last week’s news from the Fed also took the wind out of reflation trade, analysts noted, racking up commodity issues, after China last week announced plans to tap domestic reserves of metals to slow down a rally in the sector. Futures contracts for iron ore and copper fell almost 1%.
Marshall Gittler, analyst at BDSwiss, noted that âexpectations of higher interest rates and lower inflation – as well as measures taken by China to curb speculation – have pushed commodity prices down sharply. “.
Shares in mining giants listed in London
who are all large producers of iron or copper, were weaker. Rio Tinto stock was further penalized by a downgrade of the Swiss bank UBS, which changed its rating of the stock to sell it from neutral, noting the risks of a more hawkish Fed and China. taking action to deflate commodity prices.
Shares of Morrisons, one of the UK’s largest supermarket groups and e-commerce giant
grocery delivery partner in the country – jumped almost 32%. Analysts expect the company to attract more takeover bids, after rejecting an Â£ 8.7bn ($ 12bn) bid from U.S. private equity firm Clayton, Dubilier & Rice over the weekend.
the French media giant, rose nearly 1%, after blank check group Pershing Square Tontine Holdings, founded by billionaire US investor Bill Ackman, agreed on Sunday to buy 10% of Universal Music Group . The deal, worth around $ 4 billion, gives Universal Music an enterprise value of 35 billion euros ($ 41.6 billion). Pershing Square shares rose around 2% in the US pre-market.
the stock fell nearly 1%, after a report this weekend that the group was preparing to buy its first property as part of a new diversification plan by becoming a private owner. The move would make it the first major UK retail bank to embark on private leasing, the Mail on Sunday reported.
On the US economic front, investors can expect the Chicago Fed’s national activity index for May.
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