Asian stocks traded mixed on Wednesday as investors mulled the progress of stimulus talks in Washington and reports of a plan to review the U.S.-China trade deal. Gold touched a record high.
Shares fell in Japan, Australia and Shanghai, but rose modestly in South Korea and Hong Kong. S&P 500 futures were little changed after the index wavered between losses and gains through Tuesday before closing modestly higher. The dollar weakened against major peers. Ten-year Treasury yields stayed near their lowest since March.
Pressure is growing on Republicans and Democrats to resolve differences over a new U.S. virus relief package. Treasury Secretary Steven Mnuchin said the goal is to strike a deal on legislation by the end of the week. Meanwhile, America and China plan to assess their trade agreement mid-August against a backdrop of rising bilateral tension, according to people briefed on the matter.
The outcome of U.S.-China talks will be key for markets, said Shana Sissel, chief investment officer at Spotlight Asset Group Inc. “China really hasn’t been able to meet their hurdles to be in compliance with phase one of the trade deal” because of the pathogen, and rhetoric on both sides is set to increase as the U.S. election nears, she said on Bloomberg TV.
California reported the fewest new coronavirus cases since June, while Florida and Arizona also saw their infections slow, signaling an easing in some of the U.S. states hardest-hit by the pandemic in recent weeks. In Europe, Germany, Poland and the Netherlands recorded increases in new cases.
“Stocks aren’t cheap broadly speaking,” Michael Cuggino, president at Permanent Portfolio Family of Funds Inc., said on Bloomberg TV. “I would probably recommend some sort of consolidation, some sort of retracement because I think the values have just gotten overextended.”
Elsewhere, oil was steady after climbing to its highest in nearly two weeks as an explosion at Lebanon’s main port rocked the capital Beirut, stoking fears over instability in the region.
Michael Purves of Tallbacken Capital Advisors says this equity rally is hated. He speaks on “Bloomberg Surveillance.”
Source: Bloomberg
Here are some key events coming up:
- Euro-zone PMI reports are scheduled for Wednesday.
- Reserve Bank of India and Bank of England rate decisions due Thursday.
- Dallas Fed President Robert Kaplan discusses the U.S. economy at Thursday event.
- July U.S. employment and jobs reports expected Friday.
These are some of the main moves in markets:
Stocks
- S&P 500 futures were flat as of 12 p.m. in Tokyo. The S&P 500 Index rose 0.4%.
- Topix index fell 0.8%.
- Australia’s S&P/ASX 200 Index fell 0.8%.
- South Korea’s Kospi index rose 1%.
- Hong Kong’s Hang Seng Index rose 0.3%.
- Shanghai Composite Index fell 0.3%.
- Euro Stoxx 50 futures rose 0.1%.
Currencies
- The yen was at 105.56 per dollar, up 0.2%.
- The offshore yuan rose 0.2% to 6.9603 per dollar.
- The Bloomberg Dollar Spot Index fell 0.2%.
- The euro was at $1.1819, up 0.1%.
Bonds
- The yield on 10-year Treasuries held at 0.51%.
- Australia’s 10-year bond yield fell two basis points to 0.81%.
Commodities
- West Texas Intermediate crude oil traded at $41.72 a barrel.
- Gold slipped 0.2% to $2,015.44 an ounce, after a 2.1% increase.
Source: Bloomberg