Tuesday, January 18

Stocks fall, Treasuries rise in cautious trading: markets wind down


Stocks fell on Wednesday and Treasuries rose as investors weighed in on the economic implications of the omicron coronavirus outbreak.

Shares fell in Japan, tech stocks reversed in Hong Kong and China slipped. US futures fluctuated after the S&P 500 and Nasdaq 100 weakened on Tuesday, breaking four trading sessions. Volumes remained low until the end of the year in some markets.

Confidence in China is being undermined by Beijing’s strict supervision of overseas share sales and the economic risks of a slowdown in ownership. Authorities are expected to add stimulus next year to the steady expansion.

A key indicator of interbank financing costs in China fell to the lowest level since January after the nation’s central bank added more cash to the financial system to ease a seasonal surge in demand for liquidity.

Yields on US Treasuries fell and the dollar was little changed. Crude oil held near a month-long high, in part on bets that the global recovery may overtake Omicron. Bitcoin hovered around $ 48,000 after a drop that hinted at a decline in enthusiasm for more speculative assets.

Investors are closing out the year by booking some gains after a 17% jump in global stocks. The coronavirus, tightening of Federal Reserve policy and China’s outlook are among the key risks for 2022. Omicron’s fears are on the wane due to mounting evidence that the fast-spreading strain leads to milder symptoms.

“We’re pretty constructive going into 2022,” Katie Nixon, chief investment officer at Northern Trust Wealth Management, said on Bloomberg Television. “We are having starts and starts related to this omicron variant, of course. This will perhaps create delayed but not destroyed demand. ”

On China, Nixon said much stronger policy measures are needed in 2022 to fuel growth and help rekindle interest in emerging market stocks, which will otherwise remain one of the big uncertainties for investors.

In the latest US data, the Richmond Fed Manufacturing Survey rose in December, beating estimates. House price growth in the United States cooled moderately in October after skyrocketing during the pandemic.

“We are sober about the possible headwinds that could still come, even the rest of this year, but early 2022 – the Fed is going to raise rates, that will change things for the markets,” Ann Miletti, director of equity assets in Allspring Global Investments, he said on Bloomberg Television. “We’re also hopeful because looking at a lot of economic data, it’s still strong.”

Elon Musk continued to divest Tesla Inc. shares, selling just over $ 1 billion worth of stock.

What to watch this week:

  • Initial Unemployment Claims in the United States, Thursday

Some of the main movements in the markets:

Stocks

  • S&P 500 futures were flat at 1:50 pm in Tokyo. The S&P 500 fell 0.1%
  • Nasdaq 100 futures were up 0.3%. The Nasdaq 100 fell 0.5%
  • Japan’s Topix Index lost 0.5%
  • Australia’s S & P / ASX 200 Index rose 1.3%
  • South Korea’s Kospi Index fell 1%
  • Hong Kong’s Hang Seng Index lost 0.9%
  • China’s Shanghai Composite Index fell 0.8%
  • Euro Stoxx 50 futures rose 0.3%

Coins

  • The Japanese yen changed little to 114.83 per dollar
  • The offshore yuan was at 6.3732 to the dollar.
  • The Bloomberg Dollar Spot Index was flat
  • The euro was at $ 1.1304

Captivity

  • The 10-year Treasury yield fell one basis point to 1.47%.
  • The yield on Australia’s 10-year bonds fell about three basis points to 1.54%.

Raw Materials

  • West Texas Intermediate crude was at $ 76 a barrel
  • Gold was at $ 1,806.84 an ounce

© 2021 Bloomberg


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