Tuesday, January 18

Stocks rise, dollar falls amid Evergrande report: markets close


Most Asian stocks rose on Friday and the dollar fell when a report that developer China Evergrande Group pulled back from the brink of default helped sentiment.

MSCI Inc.’s gauge of Asia-Pacific stocks rose amid a rally in Chinese real estate stocks. Local media said Evergrande paid out a dollar bond coupon before the weekend’s deadline. Chinese junk bonds and the Australian dollar rose. The report eased concerns about possible contagion from any company default.

The S&P 500 hit an overnight record, but the mood soured after the cash session when Snap Inc., owner of the Snapchat app, fell into a moderate earnings outlook, hurting others. technology shares in the latest trades. Nasdaq 100 futures fell, S&P 500 contracts changed little, and Europeans advanced.

The 10-year US Treasury yield fell below 1.70%, but remained higher for the week. The Federal Reserve is closing in on a reduction in bond purchases and traders are raising the stakes on rate hikes to quell price pressures. Market implicit inflation expectations have reached multi-year highs.

Global stocks are scheduled for a third weekly advance, helped by the ongoing global recovery from the health crisis. The rebound is overshadowed by the prospect of a faster-than-expected tightening of monetary policy to curb inflation, which is being fueled by an energy crisis and crisp supply chains.

“The US economy is still on a solid footing, but now inflation remains the biggest threat,” Edward Moya, a senior market analyst at Oanda Corp., wrote in a note, adding that investors are waiting more earnings reports, as well as the final form of President Joe Biden’s Economic Agenda.

Biden said he doesn’t think there will be enough Democratic votes to raise tax rates on a deal on that agenda, but that he believes it will reach an agreement on the overall legislative package. A White House official said Biden was referring only to increases in corporate tax rates.

In Australia, the central bank bought A $ 1 billion ($ 746 million) of April 2024 bonds to defend its yield target. Yield fell towards the 0.1% target.

Snap’s perspective included a warning that global supply chain problems are affecting ad spending. Shares of other tech companies exposed to digital advertising, such as Facebook Inc. and Twitter Inc., weakened at the end of the trade.

Elsewhere, crude oil was down and Bitcoin leveled off after retreating from its recent record high.

Events to watch this week:

  • Fed Chairman Jerome Powell takes part in a policy panel discussion on Friday

Some of the main movements in the markets:

Stocks

  • S&P 500 futures were down 0.1% at 1:58 pm in Tokyo. The S&P 500 rose 0.3%
  • Nasdaq 100 futures fell 0.5%. The Nasdaq 100 rose 0.7%
  • Japan’s Topix index held steady
  • Australia’s S & P / ASX 200 Index Flat
  • South Korea’s Kospi index rose 0.1%
  • China’s Shanghai Composite Index added 0.1%
  • Hong Kong’s Hang Seng Index increased 0.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was at $ 1.1626
  • The Japanese yen was at 114.05 to the dollar, down 0.1%.
  • The offshore yuan was at 6.3952 to the dollar.

Captivity

  • The 10-year Treasury yield fell two basis points to 1.68%.
  • The yield on Australia’s 10-year bonds was two basis points higher, at 1.81%.

Raw Materials

  • West Texas Intermediate crude was at $ 82.15 a barrel, down 0.4%.
  • Gold was at $ 1,786.63 an ounce, up 0.1%.

© 2021 Bloomberg


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