The dollar steadied near a more than two-year low while Asian stocks were mixed despite a record close for their U.S. peers. The morning session for Hong Kong’s equity market was canceled due to a typhoon.
Shares rebounded in South Korea from Tuesday’s slide, were little changed in Japan and climbed in Australia. Chinese shares slipped amid a request from the Trump administration for U.S. colleges to divest them. S&P 500 futures were steady after the gauge eked out a gain to close above the previous Feb. 19 all-time high. European contracts pointed to modest gains. Traders in Hong Kong are expecting the equity market to reopen later Wednesday. Treasuries ticked higher.
Massive stimulus injections and a surge in technology companies have driven the rebound in American equities from a pandemic-induced selloff. Coronavirus case numbers in the U.S. look to be improving, as evidence grows that the peak of the flareup across Sunbelt states is over. While stimulus talks have stalled, better-than-feared economic data and corporate earnings have instilled optimism that a recovery is taking shape.
“We have a Federal Reserve that is all in, keeping rates low probably across the curve for as far as the eye can see,” Katie Nixon, chief investment officer at Northern Trust Wealth Management, said on Bloomberg TV. “That is supportive of higher valuations.”
House Speaker Nancy Pelosi indicated that Democrats might cut their stimulus proposal to seal a deal with Republicans and speed Covid-19 relief, then come back after the November elections with additional agenda items. Meanwhile, China denounced the U.S.’s latest moves to curb Huawei Technologies Co.’s access to commercially available chips, the latest blow in an increasingly tense relationship between the world’s two biggest economies.
Elsewhere, oil eased from a five-month high after a report signaled surging U.S. gasoline stockpiles before OPEC and its allies meet to assess its supply agreement. Gold slipped back below $2,000 an ounce.
Katie Nixon, Northern Trust Wealth Management chief investment officer, says growth and value stocks are going through “fits and starts.”
Source: Bloomberg
Here are some key events coming up:
- Target Corp. and Nvidia Corp. report on Wednesday. Results from Alibaba Group Holding Ltd. and Qantas Airways Ltd. are due Thursday.
- Minutes of the latest FOMC meeting are due Wednesday.
- The EIA’s crude oil inventory report comes out Wednesday.
- The Joint Ministerial Monitoring Committee — the panel that reviews the OPEC+ agreement — is due to meet on Wednesday.
- U.S. jobless claims for the week ended Aug. 15 are due Thursday.
- China’s loan prime rate is due Thursday.
- Euro-area PMIs will be released on Friday.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 gained 0.2% as of 1:08 p.m. in Tokyo. The index rose 0.2% on Tuesday.
- Japan’s Topix index added 0.2%.
- Shanghai Composite lost 0.3%.
- South Korea’s Kospi rose 0.7%.
- Australia’s S&P/ASX 200 Index gained 1%.
- Euro Stoxx 50 futures climbed 0.3%.
Currencies
- The Bloomberg Dollar Spot Index was steady.
- The euro bought $1.1934, little changed.
- The yen slid 0.1% to 105.54 per dollar.
- The offshore yuan traded at 6.9149 per dollar, down 0.1%.
Bonds
- The yield on 10-year Treasuries was down one basis point at 0.66%.
- Australia’s 10-year yield was at 0.87%.
Commodities
- West Texas Intermediate crude decreased 0.5% to $42.66 a barrel.
- Gold was at $1,993.65 an ounce, down 0.4%.
Source: Bloomberg