Asian Stocks, U.S. Futures Rise as Bonds Stabilize: Markets Wrap
Asian Stocks, U.S. Futures Rise as Bonds Stabilize: Markets Wrap
Zeno Markets 8
U.S. futures and Asian stocks rose Thursday as sentiment received a fillip from a pause in the global sovereign-bond selloff and possible steps to ease the cash crunch in China’s struggling property sector.
MSCI Inc.’s Asia-Pacific share index snapped a five-session drop, led by a climb in Hong Kong amid a technology rally. U.S. and European futures were in the green. The S&P 500 shed 1% in a choppy session Wednesday, while the Nasdaq Composite entered a correction, down over 10% from a November high.
Chinese regulators are considering making it easier for builders to access certain funds from presold properties, a step that would help tackle the industry’s liquidity crunch. An index of property developer shares climbed. Separately, Chinese lenders lowered borrowing costs to boost the economy.
Treasury yields steadied but remain higher for the week on concerns about elevated inflation and the prospect of Federal Reserve interest-rate hikes. A dollar gauge was little changed, crude oil held gains and gold was around a two-month high. Australia’s currency advanced on a tumble in unemployment.
The dominant theme for markets remains prospective Fed rate hikes and the possible reduction of its holdings in Treasuries starting later in 2022. The withdrawal of outsized stimulus threatens to inject more volatility across a range of assets. Global stocks have already dropped more than 3% this year.
“The market is now facing uncertainty regarding both rate hikes and the balance sheet,” Steven Englander, global head of G-10 FX research at Standard Chartered Bank, wrote in a note. He added that there’s scope for recent bond-market volatility to continue in the short term.
Biden on Fed
President Joe Biden said it’s the Fed’s job to rein in the fastest inflation in decades, and backed the central bank’s plans to scale back stimulus.
He also indicated his $2 trillion economic agenda will have to be broken up, and said he isn’t ready to ease tariffs on China yet. On Russia-Ukraine tension, he said he believed Russia will “move in” on Ukraine, adding such a step would hurt President Vladimir Putin “badly.”
In the U.S., upbeat earnings from companies including Morgan Stanley, UnitedHealth Group Inc. and Procter & Gamble Co. failed to shore up sentiment.
The earnings season so far has been a little bit rocky, and investors need to monitor commentary from companies about price and wage pressures, Rebecca Felton, RiverFront Investment Group senior market strategist, said on Bloomberg Television.
“We do believe stocks can continue to go higher even as the Fed changes policy,” she said, adding corporate profits will still likely beat estimates.
For more market analysis, read our MLIV blog.
What to watch this week:
- Netflix is among companies publishing earnings during the week
- U.S. data includes jobless claims Thursday
- Interest-rate decisions due from nations including Norway, Turkey and Ukraine, Thursday
- EIA crude oil inventory report, Thursday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.6% as of 6:56 a.m. in London. The S&P 500 fell 1%
- Nasdaq 100 futures rose 0.8%. The Nasdaq 100 fell 1.1%
- Japan’s Topix index added 1%
- Australia’s S&P/ASX 200 index rose 0.1%
- South Korea’s Kospi index climbed 0.7%
- Hong Kong’s Hang Seng index rose 3.1%
- China’s Shanghai Composite index dropped 0.1%
- Euro Stoxx 50 futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index was steady
- The euro was at $1.1349
- The Japanese yen was at 114.45 per dollar
- The offshore yuan was at 6.3484 per dollar
Bonds
- The yield on 10-year U.S. Treasuries declined one basis point to about 1.85%
- Australia’s 10-year bond yield was at 1.99%
Commodities
- West Texas Intermediate crude fell 0.1% to $86.90 a barrel
- Gold was at $1,840.03 an ounce
