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European stocks fell and the U.S. dollar rose on Monday, on worries the U.S. Federal Reserve isn’t eager to keep bolstering its balance sheet with investors also wary of the remainder of the term of U.S. President Donald Trump.
Up 3% last week, the Stoxx Europe 600 SXXP, -0.40% did x in early action.
U.S. stock futures ES00, -0.62% fell, and the dollar DXY, +0.39% rose.
Bond yields TMUBMUSD10Y, 1.103%, which move in the opposite direction to prices, have picked up on concerns the Federal Reserve will be less interested in maintaining the rate of its purchases of them. On Friday, Federal Reserve Vice Chair Richard Clarida said he expected that the current pace of bond purchases would remain through the end of the year. Other Fed officials have started talking about tapering those purchases later in 2021.
Utilities SX6P, -1.13%, which are often called bond proxies, were the worst-performing sector in Europe on Monday.
Markets also are keeping a wary eye on politics, as House Speaker Nancy Pelosi said impeachment articles would be introduced if Trump isn’t removed by invoking of the 25th Amendment. Vice President Mike Pence, the target of Trump’s ire, is reportedly not interested in doing so.
“Markets are opening with a small wobble on the risk axis this morning as perhaps investors reaching a near term inflexion point. However, it’s too early to say as investors have their feet firmly planted and continue to roar like lions supported by a lengthy vaccine runway paved with U.S. stimulus,” said Stephen Innes, chief global market strategist at Axi.
Of stocks on the move, Signature Aviation SIG, +8.37% rose 8% to 438 pence after accepting a $4.63 billion bid from Global Infrastructure Partners that values the aviation services firm at 405 pence per share. Rival private-equity groups Carlyle Investment Group and Blackstone have separately indicated interest in the company.
JD Sports Fashion JD, +4.25% rose 5% after saying its pretax profit for the year ending Jan. 31 will be at least £400 million, compared with market expectations of £295 million. The sporting-goods retailer added next year’s profit will grow between 5% and 10%.
Smith & Nephew SN, -2.32%, the U.K. medical device maker, fell 3% after saying its fourth-quarter adjusted revenue fell 7%, hurt by the COVID-19 pandemic leading to postponement of medical procedures.
