Tuesday, January 18

US Futures, Most Asian Stocks Up; crude rises: markets close


US and European equity futures rose on Friday along with most Asian stocks amid optimism that the recovery from the pandemic can withstand high inflation and tighter monetary policy.

China’s stock market led Asian gains, while Japan rose following the confirmation of a stimulus package. Hong Kong struggled when Alibaba Group Holding Ltd. sank into a trimmed earnings outlook, contributing to a drop in a gauge for Chinese tech stocks.

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The travails of China’s tech companies contrast with the more optimistic mood around their American counterparts. Nasdaq 100 contracts outperformed after megacap technology helped drive Wall Street to all-time highs in a choppy session before options expired on Friday.

Treasury yields were up and a gauge of the dollar was on course for a fourth weekly advance. Commodities such as crude oil, iron ore and copper were up. Gold changed little. Bitcoin extended a slide, falling to roughly $ 56,000.

Global stocks continue to hover near records, fueled by strong US corporate earnings growth. But price pressures that could accelerate interest rate hikes and hamper a recovery from the pandemic are overshadowing earnings. markets. Federal Reserve Bank of Atlanta president Raphael Bostic said it would be appropriate to try to raise rates around the summer of next year.

“You can come up with a very strong list of reasons why you shouldn’t invest,” said Kristen Bitterly, regional director of investments for North America at Citi Private Bank, on Bloomberg Television. “The best way to combat that is really with the record profitability we’ve seen and recognizing that not all parts of the market are the same.”

Rate increase bets

More commentators are predicting a faster pace of Fed policy tightening. For example, strategists at TD Securities followed those at Citigroup Inc. and Morgan Stanley in recommending Eurodollar trades that pay off if the Fed raises rates. way more aggressively than is currently expected.

Meanwhile, lawmakers in the US House of Representatives must vote on President Joe Biden’s roughly $ 2 trillion economic plan. The fate of the bill in the Senate is still uncertain. Traders are also monitoring Biden’s election for the Fed president candidate of Governor Lael Brainard and incumbent Jerome Powell.

Meanwhile, China Beige Book International CEO Leland Miller, speaking on the sidelines of the Bloomberg New Economy Forum in Singapore, said China’s economy is slowing down more than people think.

The People’s Bank of China warned against one-way bets on the yuan after the currency rose to a six-year high against a basket of pairs.

What to watch this week:

  • Richard Clarida and Mary Daly of the Fed speak at the Asia Economic Policy Conference. Friday.

Some of the main movements in the markets:

Stocks

  • S&P 500 futures were up 0.4% at 7:04 am in London. The S&P 500 rose 0.3%
  • Nasdaq 100 futures rose 0.5%. The Nasdaq 100 rose 1.1%
  • Japan’s Topix index rose 0.4%
  • South Korea’s Kospi increased by 0.8%
  • Australia’s S & P / ASX 200 Index rose 0.2%
  • Hong Kong’s Hang Seng Index lost 1.2%
  • China’s Shanghai Composite Index rose 1.1%
  • Euro Stoxx 50 futures rose 0.4%

Currencies

  • The Bloomberg Dollar Spot Index held steady
  • The euro was at $ 1.1356
  • The Japanese yen was at 114.33 to the dollar, down 0.1%.
  • The offshore yuan was at 6.3835 to the dollar, down 0.1%.

Captivity

  • The 10-year Treasury yield rose one basis point to 1.60%.
  • Australia’s 10-year bond yield increased two basis points to 1.81%.

Raw Materials

  • West Texas Intermediate crude added 0.8% to $ 79.67 a barrel
  • Gold was at $ 1,858.55 an ounce.

© 2021 Bloomberg


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