Good morning. Stocks head for best week this year on central bank optimism, traders wait for Fed speakers and sportswear firms face a tough [View in browser](
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Good morning. Stocks head for best week this year on central bank optimism, traders wait for Fed speakers and sportswear firms face a tough day. Hereâs whatâs moving markets. â [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Stocks Surge A raft of central bank meetings have this week signaled hopes for [rate cuts this year are on track](, boosting tradersâ optimism and leaving stocks [headed for their best week of the year](. MSCIâs global gauge of shares climbed more than 2% in the week so far, while futures contracts for the S&P 500 indicate itâs poised to extend its 2.4% advance, the most since mid December. The move comes after US stocks saw [hefty outflows]( in the runup to the Federal Reserveâs policy meeting that took the S&P 500 Index to fresh all-time [highs](. Fed Focus The central bank shift has also boosted bonds. Treasuries rose for a fourth day Friday, taking the 10-year yield almost 10 basis points lower in the week.  Not everyone is happy about the direction of travel for central banks though. Former Treasury Secretary Lawrence Summers yesterday accused the Fed of having [âitchy fingersâ on rate cuts]( in face of a stronger economy. Weâll hear more from the Fed today as Chair Jerome Powell, Vice Chair Philip Jefferson and Governor Michelle Bowman appear at a Fed Listens event in Washington. Michael Barr and Raphael Bostic are also due to speak at other events. Sportswear Swoon Butâs shaping up to be a bad day for sportswear firms. Nike is down more 7% in pre-market trading after warning investors that sales will take a [hit later this year]( as it works to realign merchandise to better match what shoppers want to buy. Meanwhile Lululemon Athletica is down 12% after it said visits to US stores [slowed at the beginning](of the year, leading to a lower-than-expected sales outlook for the first quarter and full year. Shares in Adidas, Puma and JD Sports all fell on Friday in Europe as the concerns rippled through the industry. Apple Woes Apple, meanwhile,, is little changed in pre-market trading after a 4.1% slide Thursday that erased about $113 billion in market value and took its year-to-date loss to 11%. The firm has[regulators on both sides of the Atlantic]( training their eyes on it, unnerving investors with fears over fines and threatening its market dominance. China Loosens Grip Chinese authorities have kept the yuan in a vise-like grip for four months, but now signs are emerging that they are ready to allow the currency to weaken. The onshore yuan on Friday [slipped beyond the 7.20 per dollar]( line that had mostly held since November. The decline sent ripple effects across Asian markets, accelerating losses in some regional currencies and weighing on sentiment toward China-linked assets. What weâve been reading This is whatâs caught our eye over the past 24 hours. - The FTSE 100 [closes in on a record](after BOE shift.
- Vodafone-Threeâs UK combination faces [full-blown deal review.](
- [Billionaireâs luxury London homes]( to hit market at awkward time.
- China scrutinizes PwC role in [$78 billion Evergrande fraud case](.
- Bond traders [raise the alarm]( on Intrumâs mountain of debt. And finally, here's what Edâs interested in this morning If you had to sum up Thursdayâs market action in a word, it would be... Reddit! Thatâs because on the day after a Federal Reserve policy announcement initially met with joy across markets, it was only risk assets that continued the initial Goldilocks rally from Wednesday. Treasuries saw profit taking that pushed yields up, with 2-year yields rising the most across the curve. But Reddit saw shares pop as much as 67%, even after pricing its IPO at the top of the marketed range. This was the second consecutive day of a hot IPO for a loss-making company too. On Wednesday, the AI-related IPO of Astra Labs popped some 72%, giving it the biggest first-day gain for a sizable US IPO since June 2021. That seeming disconnect between stocks and bonds can be explained via news out of Switzerland though, as the Swiss National Bank was the first G-10 central bank to declare inflation slain and cut interest rates. The result is a recognition that the cutting cycle has now begun, putting a cap on rates even if most of the dayâs price action in the US saw profit-taking. What was a 5% peak for 5- or 10-year US Treasury yields in 2023 may now be 4.5% in 2024. In the context of a soft-landing US economy, thatâs bullish for stocks, especially high beta stuff like Reddit. Once inflation gets even in the ballpark of 2%, say 2.4 or 2.5%, itâs game on for Fed cuts. And thatâs when the real asset market rally could begin. Ed Harrison leads the US FX/rates team and writes the Everything Risk newsletter. Follow him on X at [@edwardnh](. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before itâs here, itâs on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals canât find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
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