Friday, January 21

US equities and futures rise amid vaccine optimism: markets wind down


Asian stocks rose along with US and European equity futures on Tuesday due to optimism about the US vaccination campaign and continued economic support from central banks. Treasury bonds fell and the dollar maintained a decline.

An indicator for Asia-Pacific stocks was set for the best two-day rise since February, helped by a rally in Chinese tech stocks. JD.com Inc. skyrocketed after the e-commerce giant’s results resisted Beijing’s regulatory crackdown. China’s central bank promise to boost credit support helped confidence.

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US and European stock futures rose shortly after US stocks extended a rally following full approval for the launch of Pfizer Inc.-BioNTech SE. The measure turned out to be a stimulus for the reactivation of trade, since it raises the possibility of more vaccine mandates to prop up the economic reopening.

Treasury yields rose as traders await the Jackson Hole meeting. Oil was stable after a jump of more than 5%, and the risks of Covid-19 still persist. Gold was close to the highest level in more than two weeks.

Markets are in a more optimistic frame of mind compared to last week, when doubts prevailed about the pace of the recovery. Traders await Jackson Hole starting Thursday for clues on how and when the Federal Reserve plans to cut stimulus. Threats from the delta virus variant have raised questions about whether officials will refrain from pointing to a decreasing timeline.

“The feeling is that Fed Chairman Jay Powell will err on the side of caution at this week’s Jackson Hole symposium and will not offer advance notice of reducing his asset purchase program,” wrote Chris Weston, chief of Pepperstone Financial Pty research, in a note. . He added that some traders may have felt that “now is the time to get into a bit of cyclicality.”

The latest US data was mixed: July home sales were higher than expected, while growth in US services and factories slowed to an eight-month low. Traders are also monitoring President Joe Biden’s $ 4.1 trillion economic agenda, with key votes in the House of Representatives.

Elsewhere, Thai baht gained as much as 1% amid optimism that the nation’s virus infections may be peaking.

Here are some events to watch this week:

  • Bank of Korea Policy Decision; Governor Lee Ju-yeol briefing on Thursday
  • Fed officials attend Jackson Hole Economic Policy Symposium Thursday through Saturday
  • US GDP, Initial Jobless Claims Thursday
  • July Personal Income and Expenses in the US Friday. Investors will look at the price index for personal consumption expenditures, an inflation measure that the Fed is closely monitoring.

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Stocks

  • S&P 500 contracts rose 0.2% at 7am in London. The S&P 500 rose 0.9%
  • Nasdaq 100 futures were up 0.2%. The Nasdaq 100 rose 1.5%
  • Japan’s Topix Index gained 1.1%
  • Australia’s S & P / ASX 200 Index added 0.2%
  • South Korea’s Kospi index rose 1.5%
  • Hong Kong’s Hang Seng Index gained 1.7%
  • China’s Shanghai Composite Index rose 1.1%
  • Euro Stoxx 50 Futures Gained 0.2%

Currencies

  • The Japanese yen is trading at 109.80 per dollar.
  • The offshore yuan was at 6.4788 to the dollar.
  • The Bloomberg Dollar Spot Index fell
  • The euro was at $ 1.1743

Captivity

  • The 10-year Treasury yield rose two basis points to 1.27%.
  • The yield on Australia’s 10-year bonds increased by around six basis points to 1.15%.

Raw Materials

  • West Texas Intermediate crude was at $ 65.90 a barrel, up 0.4%.
  • Gold was at $ 1,803.47 an ounce, down 0.1%.

© 2021 Bloomberg


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