U.S. futures and Asian stocks began the week with gains after equities reached fresh highs last week. The dollar traded near the lowest in more than two years, while the yen pared some of Friday’s climb as Japan looks for a new prime minister.
Shares in Japan outperformed, bolstered by Berkshire Hathaway Inc.’s purchase of stakes in five major trading companies, one of billionaire Warren Buffett’s biggest investments in the nation. Hong Kong and China rose, but South Korea fell. Treasuries slipped, while both gold and crude oil advanced.
The S&P 500 closed at an all-time high for a sixth consecutive trading session Friday, while the Nasdaq Composite also reached a record. Chinese economic activity continued to rebound in August as the world’s second-largest economy emerges from the virus slump.
A gauge of global equities is on course to rise for a fifth straight month, the longest such streak since early 2018. Investors have taken comfort from the global economy’s reemergence from virus shutdowns, prospects for a vaccine and a commitment by central banks to foster the recovery, underscored last week by the Federal Reserve’s plan to shift to a more relaxed approach on inflation.
Still, coronavirus infections in the U.S. are ticking up again, India recorded its biggest daily spike and cases worldwide surpassed 25 million, illustrating the pandemic isn’t beaten yet.
“While momentum has slowed in light of rising cases, in the U.S. in July and in Europe in August, the economic recovery continues to unfold,” Esty Dwek, head of global market strategy at Natixis Investment Managers Solutions, said in a note. “Central banks have already stated they would remain ultra-accommodative for a long time. Risk assets are likely to remain supported, even if the ride will probably be bumpy.”
A gauge of China’s services industry was at the strongest level since early 2018 in August. Government-led investment has boosted demand and some reopening of overseas economies aided the export sector.
Meanwhile, tensions between the U.S. and China continue to simmer. In another development, ByteDance Ltd. will be required to seek Chinese government approval to sell the U.S. operations of its short-video TikTok app under new restrictions Beijing imposed on the export of artificial intelligence technologies.
Crude oil traded above $43 a barrel and gold ticked higher.
Eisuke Sakakibara, Japan’s former top currency official known also known as Mr. Yen, discusses the outlook for the currency, central bank policy and the economy.
Source: Bloomberg
Here are some key events to watch this week:
- Reserve Bank of Australia hands down its policy decision Tuesday.
- Australia GDP is due Wednesday.
- U.S. jobless claims for the week ended Aug. 29 are due Thursday.
- U.S. jobs report on Friday is forecast to show payrolls continued to rebound in August from virus lows.
Here are the main market moves:
Stocks
- S&P 500 futures rose 0.5% as of 12:52 p.m. in Tokyo. S&P 500 Index rose 0.7% Friday.
- Topix index climbed 1.5%.
- Australia’s S&P/ASX 200 Index rose 0.2%.
- Hong Kong’s Hang Seng Index rose 1.4%.
- Shanghai Composite Index gained 0.8%.
- Kospi index fell 0.9%.
- Euro Stoxx 50 futures rose 0.8%.
Currencies
- The yen traded 0.3% lower at 105.67 per dollar.
- The offshore yuan rose 0.1% to 6.8507 per dollar.
- The euro was at $1.1902.
- The Bloomberg Dollar Spot Index fluctuated after dropping 0.9% Friday.
Bonds
- The yield on 10-year Treasuries was at 0.72%.
- Australia’s 10-year bond yield fell five basis points to 0.97%.
Commodities
- West Texas Intermediate crude was at $43.13 a barrel, up 0.4%.
- Gold rose 0.3% to $1,970.81 an ounce.
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