Stocks Extend Rally as AI Bulls Wait for Palantir: Markets Wrap
(Bloomberg) — A six-month bull run in US stocks is set to continue, with investors gearing up for earnings from Palantir Technologies Inc. and a slate of private economic reports for fresh direction on the path for interest rates.
S&P 500 futures rose 0.4%, signaling a firm start to November for the US benchmark. Contracts for the Nasdaq 100 climbed 0.6%. Palantir, one of the year’s biggest beneficiaries of the artificial-intelligence boom with a 165% gain, was poised rally further ahead of results due after the close.
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European and Asian equities also rose. Global bonds softened, with the 10-year US Treasury yield at 4.08%. Gold trimmed early gains as haven demand faded, while the dollar held steady.
The rally in equities is continuing as markets brush aside concerns over stretched valuations, with earnings beating expectations and big tech fueling optimism around AI. Private data will come into focus this week — with the government shutdown on track to become the longest in history — after Federal Reserve Chair Jerome Powell cautioned against assuming a December rate cut.
“Earnings growth is there, the momentum is there and on a macro level — although it’s still very volatile — things are moving in the right direction,” said Andrea Gabellone, head of global equities at KBC Global Services. “I don’t see any reason for the rally not to consolidate and even go higher.”
In emerging markets, Nigeria’s dollar bonds suffered the biggest losses after US President Donald Trump threatened military action if the country’s government doesn’t halt the killings of Christians by Islamist militants.
The West African nation’s dollar bonds fell across the maturity curve, comprising all 10 of the worst EM performers, according to data compiled by Bloomberg. The notes maturing in 2047 were down most, falling as much as 0.6 cents on the dollar to 88.26 cents before paring the decline.
US labor market clues may emerge from the Institute for Supply Management’s manufacturing and services surveys due Monday and Wednesday, followed by ADP data that’s expected to show a modest rise in October private payrolls. On Thursday, Challenger, Gray & Christmas will report announced job cuts for October.
Traders will also parse comments from a list of Fed speakers, with Governor Lisa Cook due to discuss the economy and monetary policy at an event on Monday. Alberto Musalem, John Williams and Stephen Miran are slated to speak at separate events later in the week.
While a third rate cut for 2025 in December was previously seen as a done deal, Powell’s caution and a more hawkish tone from other Fed officials prompted traders to pare back bets on further easing. Money markets now price about a 60% chance of a cut next month and around two quarter-point reductions by the time Powell’s term ends in May.
“There was some disappointment following the words of the Federal Reserve chairman, but the market will digest this and reposition,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “Further developments in the labor market will then take center stage.”
Corporate News:
Microsoft Corp. has signed an approximately $9.7 billion deal to purchase AI cloud capacity from IREN Ltd., becoming the Australian company’s largest customer. Kimberly-Clark Corp. agreed to buy Kenvue Inc. in a cash and stock deal that values the consumer-health company that owns brands like Tylenol at about $40 billion. Alphabet Inc. is planning to raise at least €3 billion ($3.5 billion) in Europe’s debt market, adding to a wave of offerings from technology companies as they invest aggressively in artificial intelligence. Davide Campari-Milano NV shares fell after Italian prosecutors on Friday ordered the seizure of around €1.3 billion ($1.5 billion) in shares from the holding company that controls the drinks maker. Analysts following Berkshire Hathaway Inc. are positive about solid performance of the conglomerate’s insurance business as the firm’s cash pile soared to a record $381.7 billion and operating earnings surged 34% in the third quarter. BBVA SA is looking to raise Additional Tier 1 capital for the first time since its lost pursuit for country peer Banco Sabadell SA was voted down by shareholders last month. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 6:52 a.m. New York time Nasdaq 100 futures rose 0.6% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 rose 0.5% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1516 The British pound fell 0.2% to $1.3129 The Japanese yen fell 0.1% to 154.15 per dollar Cryptocurrencies
Bitcoin fell 2% to $107,803.83 Ether fell 3.9% to $3,710.95 Bonds
The yield on 10-year Treasuries was little changed at 4.09% Germany’s 10-year yield advanced two basis points to 2.65% Britain’s 10-year yield was little changed at 4.41% Commodities
West Texas Intermediate crude fell 0.5% to $60.65 a barrel Spot gold rose 0.1% to $4,007.68 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from James Hirai, Macarena Muñoz and Subrat Patnaik.
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