Sunday, January 16

US Futures Fall, Stocks Mix After Tech Crashes: Markets Wrap Up


US futures tumbled on Friday as Asian stocks mixed after disappointing earnings from Amazon.com Inc. and Apple Inc. and as traders weighed bond market twists amid concerns about inflation and monetary adjustment.

Chinese stocks rose modestly, while Japan’s fluctuated. Nasdaq 100 contracts underperformed S&P 500 futures. Apple and Amazon fell in extended trading, indicating a possible more than $ 200 billion drop in combined market value when the United States reopens. . That took a toll on optimistic views on the company’s performance that previously drove Wall Street to a record close.

The yield on 10-year US Treasuries rose. The 20-30-year curve has been reversed for the first time since the US government reintroduced a two-decade maturity in 2020. Inflationary pressures and the prospect of interest rate hikes are hitting bond markets. Australian debt slipped after the central bank chose not to defend its 0.1% yield target, fueling speculation that it might drop the target.

The US dollar rose from a one-month low and crude oil fluctuated. In China, the debt crisis at China Evergrande Group remains in focus. Some holders of one of his bonds received an overdue interest payment, which gave the struggling developer more time.

Markets are grappling with a series of countercurrents. Generally positive corporate performance has helped prop up global equities. But inflation risks from supply chain tangles and more expensive raw materials are driving expectations of rate hikes and clouding the economic outlook.

“In the very short term, because many global central banks are simply setting their feet on tapering, not even quantitative adjustment, aggregate liquidity could still be very favorable,” said Vishnu Varathan, chief economics and strategy officer at Mizuho Bank Ltd. in Singapore. he said on Bloomberg Television. “Although I think you get much more discriminatory movements and much more selective movements in the stock markets.”

The latest data showed that US growth slowed more than expected in the third quarter, hampered by supply chains and an increase in Covid-19 cases. A separate report showed that weekly jobless claims fell to a pandemic low.

Biden’s Agenda

Meanwhile, President Joe Biden called on lawmakers to go ahead with a revised $ 1.75 trillion tax and spending plan, which has been lowered from a previous $ 3.5 trillion proposal. A $ 550 billion infrastructure bill is also pending.

On the other hand, the European Central Bank renewed its commitment to carry out the purchase of emergency bonds at a “moderately” slower pace. President Christine Lagarde acknowledged that inflationary pressures will last longer than expected. Investors kept interest rate hikes alive starting next year.

Coal futures extended a dramatic drop as the Chinese government said there is more room for prices to fall, increasing market interventions aimed at alleviating an energy crisis.

In cryptocurrencies, Bitcoin fell back below $ 58,000 during a sharp fade in US trading.The largest token rallied to around $ 61,200 in Asian hours. Ether, the second largest, rallied to a record.

Here are some events to watch this week:

  • G20 joint finance and health ministers meet ahead of weekend leaders’ summit, Friday

These are the main movements in the markets:

Stocks

  • S&P 500 futures were down 0.4% at 6:34 am in London. The S&P 500 was up 1%.
  • Nasdaq 100 futures lost 0.8%. The Nasdaq 100 rose 1.2%
  • Japan’s Topix Index fell 0.1%
  • South Korea’s Kospi lost 0.9%
  • Australia’s S & P / ASX 200 Index lost 1.4%
  • Hong Kong’s Hang Seng Index fell 0.5%
  • China’s Shanghai Composite Index added 0.4%
  • Euro Stoxx 50 futures fell 0.4%

Currencies

  • Bloomberg’s dollar spot index rose less than 0.1%
  • The euro was at $ 1.1673
  • The offshore yuan was at 6.3861 to the dollar.
  • The Japanese yen was at 113.62 per dollar

Captivity

  • The 10-year Treasury yield rose three basis points to 1.61%.
  • Australia’s 10-year yield increased 24 basis points to 2.1%

Raw Materials

  • West Texas Intermediate crude was at $ 82.83 a barrel
  • Gold was at $ 1,795.32 an ounce

© 2021 Bloomberg


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