Saturday, January 22

Stock recovery moderates in Asia; Stable Treasury: Markets Close


A global rally in stocks in Asia moderated on Wednesday amid uncertainty about the economic impact of the omicron virus strain and a hazy outlook for US fiscal stimulus.

A rally in tech stocks boosted Hong Kong, while markets in China and Japan held steady. US futures fell after the S&P 500 broke three days of declines and the high-tech Nasdaq 100 rose more than 2%. European contracts made modest gains.

Risk appetite revived Tuesday, fueling a jump in commodities and eroding demand for havens. Crude oil and Treasury yields remained higher, while the dollar indicator changed little.

A strong 20-year auction underscored broader structural demand for US government bonds amid excess savings and a variety of economic risks.

Thinner trading volumes approaching the Christmas holidays could exacerbate market swings, leaving strategists reluctant to read much about daily turns during the period. Markets remain in the shadow of increasing mobility restrictions to combat omicron and a diminishing tailwind stimulus.

The global reopening narrative will again gain ground over time, Nicole Webb, senior vice president of the Wealth Enhancement Group, told Bloomberg Television.

“While this variant is significant and the impact is powerful, I still have my pink glasses heading into the New Years because beneath the surface there are still a lot of opportunities” away from the exchanges taking place or sparkling, Webb said. .

Biden plan

Sentiment got a boost after President Joe Biden said he still has a chance to reach an agreement with Senator Joe Manchin to get his roughly $ 2 trillion economic plan, Build Back Better, in Congress.

On the virus front, the U.S. Food and Drug Administration is poised to authorize a couple of pills from Pfizer Inc. and Merck & Co. to treat Covid-19 as early as this week, which adds up. to the arsenal of coronavirus treatments.

Biden said that omicron will cause more infections among vaccinated Americans, but that it is highly unlikely that they will be seriously ill.

‘Strong foot’

“We have a wave of Covid, but the hangover at least with each successive wave seems to be weaker,” Rod von Lipsey, managing director of UBS Private Wealth Management, said on Bloomberg Television. “We are on a very, very solid footing from a financial and economic point of view. So we think the markets and investors will be able to resist that. ”

Singapore will freeze the sale of new tickets for flights and buses under its vaccinated travel lanes program, as the city-state seeks to stop the importation of omicron. Australian Prime Minister Scott Morrison urged the country’s state and territorial leaders to go ahead with reopening plans.

“Whipsaw price action continues ahead of the holiday season,” wrote Craig Erlam, Oanda’s senior market analyst, in a note, adding that “these are illiquid markets and omicron remains a huge cloud of uncertainty over them. “.

What to watch this week:

  • EIA Crude Oil Inventory Report Wednesday
  • Bank of Japan Governor Haruhiko Kuroda speaks Thursday
  • US Consumer Income, New Home Sales, US Durable Goods, University of Michigan Consumer Sentiment, Initial Unemployment Claims. Thursday
  • Friday: US markets are closed. European markets close earlier

Some of the main movements in the markets:

Stocks

  • S&P 500 futures fell 0.1% at 1:07 pm in Tokyo. The S&P 500 was up 1.8%
  • Nasdaq 100 futures fell 0.3%. The Nasdaq 100 rose 2.3%
  • Japan’s Topix index rose 0.2%
  • Australia’s S & P / ASX 200 Index was little changed
  • South Korea’s Kospi index rose 0.2%
  • Hong Kong’s Hang Seng Index gained 0.3%
  • China’s Shanghai Composite Index held steady
  • Euro Stoxx 50 futures rose 0.4%

Coins

  • The Japanese yen was at 114.10 to the dollar.
  • The offshore yuan was trading at 6.3798 to the dollar.
  • The Bloomberg Dollar Spot Index was little changed
  • The euro changed little to $ 1.1273

Captivity

  • The 10-year Treasury yield was 1.46%.
  • The yield on the Australia 10-year bond was 1.60%

Raw Materials

  • West Texas Intermediate crude rose 0.4% to $ 71.39 a barrel
  • Gold was stable at $ 1,790.34 an ounce.

© 2021 Bloomberg


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