Asian stocks were mixed on Friday after failing to take advantage of the wind in favor of the US, where the S&P 500 hit an all-time high amid optimism that economic growth will withstand the omicron coronavirus outbreak.
Shares fell in Japan and China, while casino companies rallied in Hong Kong thanks to favorable results from Macau’s license renewal hearings. Volumes are down and many markets are closed or truncated on Christmas Eve.
Sentiment in the US was helped by economic data that depicted a picture of strong growth, and a UK study suggesting that omicron infections are less likely to lead to hospitalization. But the research warned that the fast-spreading variant can still produce a significant number of serious cases.
Commodity-linked currencies, including the Australian dollar, fell. Gold was close to $ 1,809 an ounce. Bitcoin was trading around $ 51,000. No Treasury cash trading on Friday. They slid along with a dollar indicator on Thursday, while West Texas Intermediate crude rose to $ 74 a barrel.
A global stock market indicator has risen 3% this month, illustrating the resilience of the stock market to coronavirus risks and measures to tighten monetary policy to quell high inflation. An undercurrent of declining central bank liquidity support could put markets to the test next year.
“We certainly favor value in 2022 over growth, and we are much more on the short duration side when we look at equities and fixed income,” said Cheryl Pate, portfolio manager at Angel Oak Capital Advisors LLC.
He told Bloomberg Television that inflation in the United States could rise further and that the Federal Reserve faces a delicate balancing act to control price pressures while sustaining the economic recovery.
Dangers of inflation
Former Treasury Secretary Lawrence Summers warned of a testing period for the US economy in the coming years, with the risk of recession followed by stagnation. He said the Fed had been late in detecting the dangers of inflation.
Omicron “will create some slowdowns in the economy, perhaps some slowdowns in production that could add to inflationary pressures in the near term,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, on Bloomberg Television.
But that will fade and the economy will work its way through the situation, Christopher said.
The latest US data showed consumer confidence improved, new home sales rose, durable goods orders beat forecasts and jobless claims signaled a further recovery in the job market. But consumer spending adjusted for inflation stalled, highlighting the risks stemming from rapidly rising prices.
Elsewhere on the virus front, US regulators approved Merck & Co.’s Covid-19 pill, giving high-risk patients another home treatment option.
But doubts remain about the effectiveness of the vaccine made by Sinovac Biotech Ltd. of China, one of the most widely used in the world, against omicron after the latest laboratory study.
United Airlines Holdings Inc. and Delta Air Lines Inc. will cancel about 200 flights on Fridays due to staff shortages related to the increase in omicron cases.
Some of the main movements in the markets:
- China’s Shanghai Composite Index lost 0.7% as of 3pm in Beijing
- Hong Kong’s Hang Seng Index rose 0.1%
- Japan’s Topix Index fell 0.1%
- South Korea’s Kospi added 0.5%
- Australia’s S & P / ASX 200 Index increased 0.4%
- The S&P 500 Index rose 0.6% on Thursday
- The Nasdaq 100 index rose 0.8% on Thursday
- The Bloomberg Dollar Spot Index fell 0.1% on Thursday
- The euro was at $ 1.1330
- The Japanese yen was at 114.39 per dollar
- The offshore yuan was at 6.3748 to the dollar.
- The 10-year Treasury yield advanced four basis points to 1.49% on Thursday.
- Australia’s 10-year yield fell one basis point to 1.58%.
- West Texas Intermediate crude rose 1.4% to $ 73.79 a barrel on Thursday
- Gold was at $ 1,808.55 an ounce
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