SYDNEY- Global share markets wavered on Monday as a run of soft US data suggested downside risks for this week’s June payrolls report, while the hubbub over possible recession was still driving a relief rally in government bonds.
The search for safety kept the US dollar near 20-year highs, though early action was light with US markets on holiday.
Cash Treasuries were shut but futures extended their gains, implying 10-year yields were holding around 2.88 percent having fallen 61 basis points from their June peak.
MSCI’s broadest index of Asia-Pacific shares outside Japan were flat, while Japan’s Nikkei added 0.6 percent.
Chinese blue chips were little changed as cities in eastern China tightened COVID-19 curbs on Sunday amid new coronavirus clusters.
EUROSTOXX 50 futures added 0.5 percent and FTSE futures 0.6 percent. However, both S&P 500 futures and Nasdaq futures eased 0.6 percent, after steadying just a little on Friday.
David J. Kostin, an analyst at Goldman Sachs, noted that every S&P 500 sector bar energy saw negative returns in the first half of the year amid extreme volatility.
“The current bear market has been entirely valuation-driven rather than the result of reduced earnings estimates,” he added.
“However, we expect consensus profit margin forecasts to fall which will lead to downward EPS revisions whether or not the economy falls into recession.”
Earnings season starts of July 15 and expectations are being marked lower given high costs and softening data.
The Atlanta Federal Reserve’s much watched GDP Now forecast has slid to an annualized -2.1 percent for the second quarter, implying the country was already in a technical recession.
The payrolls report on Friday is forecast to show jobs growth slowing to 270,000 in June with average earnings slowing a touch to 5.0 percent.
