Bond Yields, Dollar Rise on $2 Trillion Aid Report: Markets Wrap

(Bloomberg) -- Treasury yields and the dollar rose Thursday after a report indicated that President-elect Joe Biden plans a Covid-19 relief package of about $2 trillion. In Asia, Japanese stocks outperformed.

Biden’s advisers recently told allies in Congress about the cost of the package, according to the report. Biden is expected to announce his economic support plans later in the day. Yields had earlier steadied after dropping from the highest levels since March following two strong bond auctions this week.

A gauge of Asia-Pacific shares edged up, on track for another record. U.S. and European stock futures pointed higher. Technology shares led Wall Street gains on Wednesday, with the Nasdaq 100 outperforming the S&P 500.

Alibaba Group Holding Ltd. and Tencent Holdings Ltd. climbed after the U.S. decided against banning American investment in the Chinese tech giants. Oil held losses and Bitcoin was little changed at about $37,500.

“This will be a great year for the economy and earnings, but just a good year for the stock market,” Bob Doll, chief equity strategist at Nuveen, said on Bloomberg TV. “In other words, I think multiples are held back a bit because of modestly rising interest rates and inflation.”

Investors are betting on an economic recovery this year and tolerating stretched stock valuations, in part on expectations of further U.S. fiscal spending and better control of the pandemic with vaccines.

The latest comments from policymakers also reinforced expectations of loose monetary policy. Fed Governor Lael Brainard pushed back against suggestions the central bank could taper its bond-buying program this year, while European Central Bank council member Francois Villeroy de Galhau said the ECB will keep an easy stance for as long as needed.

Federal Reserve head Jerome Powell is due to discuss topics including the Fed’s policy framework later Thursday. Earlier, the House of Representatives voted to impeach President Donald Trump for a second time. A Senate trial for Trump likely won’t get underway before his term ends on Jan. 20.

On the virus front, the U.K. reported the most deaths in one day since the pandemic began. Johnson & Johnson’s single-dose Covid-19 vaccine may not be authorized for use until March, weeks later than U.S. officials had suggested.

Here are some key events coming up:

These are some of the main moves in markets:

Stocks

• S&P 500 futures gained 0.3% as of 12:27 p.m. in Tokyo. The gauge rose 0.2% on Wednesday.
• Japan’s Topix index added 0.9%. The Nikkei 225 rose 1.4%.
• Hang Seng index gained 0.5%.
• Shanghai Composite lost 0.3%.
• South Korea’s Kospi index rose 0.1%
• Australia’s S&P/ASX 200 Index rose 0.5%.

Currencies

• The Bloomberg Dollar Spot Index advanced 0.1%.
• The euro bought $1.2142, declining 0.1%.
• The yen slipped 0.2% to 104.07 per dollar.
• The offshore yuan traded at 6.4689 per dollar.

Bonds

• The yield on 10-year Treasuries rose about three basis points to 1.11%.

Commodities

• West Texas Intermediate crude retreated 0.2% to $52.81 a barrel.
• Gold was at $1,838 an ounce, down 0.4%.

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