Stocks Take a Breather at Start of Data-Rich Week: Markets Wrap

(Bloomberg) — European stocks and US equity futures edged lower as investors geared up for a busy week of data, including the Federal Reserve’s preferred measure of inflation.

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Miners were a drag on Europe’s Stoxx 600 index as it pulled back 0.2% from Friday’s record close. Rio Tinto Plc and Anglo American Plc led declines in the basic resources sector amid concerns over Chinese demand. Contracts for the S&P 500 were down slightly after Wall Street’s rally stalled at the end of last week, weighed down by profit taking in megacap tech stocks. The dollar was steady, while Treasuries extended gains.

Shares in UK homebuilders dropped after Britain’s top antitrust enforcer opened an investigation into eight companies in the sector to probe the potential sharing of competitively sensitive information.

Investor focus this week is set to shift from earnings to a slate of economic data, including Thursday’s so-called core personal consumption expenditures price index, an indicator closely watched by the Fed. Fourth-quarter US GDP numbers are due Wednesday, while traders will track comments from a host of central bank officials for clues on the path for interest rates.

“There is a lot of economic data coming in this week, which will be more decisive for whether investors will stay in a risk-on mood,” said Tatjana Puhan, chief investment officer at Copernicus Wealth Management. “We should factor in the possibility that if the US economy remains strong for a few more months and US corporate earnings as well, we should see at least in the US market a further potential for positive momentum.”

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In Asian trading, MSCI Inc.’s Asia Pacific index erased an earlier advance as Hong Kong and mainland China stocks declined. Concern over China was a focus after 11 Chinese companies lost their credit ratings Friday at Moody’s Investors Service.

Expectations of additional Chinese stimulus measures were fueled by weak borrowing by local governments, stirring speculation that Beijing may pick up their slack and take on more debt….


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