Asia Stocks to Gain After U.S. Rally; Dollar Rises: Markets Wrap

Andreea Papuc
Updated

(Bloomberg) -- Asian stocks looked set to open higher Tuesday after U.S. shares had their biggest rally in about 10 weeks as concerns eased that the recent onslaught of speculative buying will derail the equity bull market. The dollar climbed.

Futures rose in Japan and Australian shares advanced. S&P 500 futures were little changed after the gauge rebounded from last week’s selloff in a broad-based advance led by technology and retail companies. Heavyweights Amazon.com Inc. and Google’s parent Alphabet Inc., which are set to report earnings Tuesday, saw notable gains. GameStop Corp. tumbled as bearish investors appeared to cover their positions.

Elsewhere, Treasuries were steady. Oil held gains. Silver futures retreated after the frantic retail trading that sent them to an almost eight-year high as it spilled into metals.

Investors are once again focusing on whether equity valuations are sustainable as more people get vaccinated against the coronavirus and economic activity picks up. JPMorgan Chase & Co. joined other strategists that believe the battle between retail traders and hedge funds is unlikely to cause a significant setback for markets.

The total value that has been shorted right now across U.S. equities is a small percentage of the overall market cap, according to Barclays Plc. strategist Maneesh Deshpande. “Even if some fraction of that gets unwound and hence a corresponding long also gets unwound, the scale of the problem is not so much as to cause a systemic risk,” he said on Bloomberg TV.

Meanwhile, more Americans have received at least one dose of a Covid-19 vaccine than have tested positive for the virus, an early but hopeful milestone in the race to end the pandemic. Chancellor Angela Merkel vowed to offer all Germans a vaccine by the end of September, even if new shots aren’t approved.

These are some key events coming up:

Earnings season is full steam ahead as companies report results, including Alibaba, GlaxoSmithKline, Ferrari, Exxon Mobil, BNP Paribas and Yum! Brands.The Reserve Bank of Australia’s policy decision comes Tuesday.Wednesday sees the EIA crude oil inventory report.The Bank of England sets rates on Thursday and an Indian central bank policy decision comes then too.The U.S. January payrolls report is due Friday, providing a first look at hiring in 2021.

These are some of the main moves in markets:

Stocks

S&P 500 futures were flat as of 8:05 a.m. in Tokyo. The S&P 500 surged 1.6%.Nikkei 225 futures rose 0.6%.Australia’s S&P/ASX 200 Index rose 0.5%.Hang Seng Index futures were little changed earlier.

Currencies

The yen was at 104.94 per dollar.The offshore yuan traded at 6.4745 per dollar.The Bloomberg Dollar Spot Index climbed 0.4%.The euro was at $1.2063.

Bonds

The yield on 10-year Treasuries was stable at 1.07%.Australia’s 10-year bond yield rose two basis points to 1.17%.

Commodities

West Texas Intermediate crude was steady at $53.57 a barrel after rising 2.6%.Gold was at $1,859.51 an ounce.Silver dropped 1.5% to $28.98 per ounce.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Originally published

Latest Stories

  • Did Bernie's inauguration outfit epitomize 'white privilege'? A San Francisco teacher thinks so.

    While the casual outerwear and mittens Sen. Bernie Sanders donned at Biden’s inauguration became a viral sensation, not everyone was cheering.

  • Fauci urges COVID vaccinations to stop new strains: 'Viruses cannot mutate if they don't replicate'

    As the U.S. turned the page on the deadliest month since the coronavirus pandemic began, the nation's top infectious disease expert urged Americans to get vaccinated to help prevent new variants from emerging.

  • Ousted Myanmar leader warned of possible army obstruction

    Aung San Suu Kyi, the Nobel Peace Prize laureate who became Myanmar's leader in 2016 following five decades of military rule, has cautioned repeatedly that the country's democratic reforms would only succeed if the powerful army accepted the changes. The military detained Suu Kyi and other senior politicians and announced it was seizing control of the country for one year under a state of emergency. Suu Kyi has spent much of her life fighting military rule.

  • Thousands of Navalny supporters rally across Russia despite fierce crackdown

    Thousands are rallying across Russia as nationwide protests in support of jailed opposition leader Alexei Navalny continue to grow. For the second straight weekend, Russians took to the streets on Sunday in the Far East and Siberia as Moscow geared up for the rally with a strict security lockdown. Defying minus 20 degrees temperatures, more than 6,000 people marched across Russia’s third-largest city of Novosibirsk on Sunday, chanting “Down with the czar!” after riot police sealed off the main square. In Vladivostok on the Pacific Ocean, police pushed the crowds on the frozen Amur Bay where officers chased protesters in the snow. More than 500 arrests were reported across the country by Sunday morning.

  • Taiwan says Chinese fighters, U.S. aircraft both entered defence zone

    Six Chinese fighter aircraft and a U.S. reconnaissance aircraft entered the southwestern corner of Taiwan's air defence identification zone on Sunday, the island's defence ministry said, in an unusual admission of U.S. military activity. Tensions have spiked over the last week or so after Taiwan reported multiple Chinese fighters and bombers flying into the zone last weekend, in an area close to the Taiwan-controlled Pratas Islands in the northern part of the South China Sea.

  • White House tries to pacify Democratic senator upset at Kamala Harris doing media in his state without telling him

    Joe Manchin annoyed at vice president plugging Covid relief without his knowledge

  • Hawaii GOP chair resigns after party tweets about QAnon

    The chairperson of the Hawaii Republican Party has resigned after a senior party member used an official Twitter account to send tweets defending adherents of the QAnon conspiracy theory. Shirlene Ostrov stepped down “to allow the party to recover from the controversy and focus on finding excellent candidates and fighting for policies that improve the quality of life for Hawaii’s hardworking families,” the party said in a statement. Ostrov said the party has been “redefining itself” since President Joe Biden was inaugurated.

  • Trump appointees aggressively lobbied against giving states COVID-19 vaccine rollout funds

    As states were formulating plans to vaccinate their residents against COVID-19 last fall, top Trump administration officials pushed Congress to deny the state governments any extra funding for the vaccine rollout, Stat News reported Sunday. The officials, including Health and Human Services Secretary Alex Azar and White House Office of Management and Budget chief Russ Vought, disregarded "frantic warnings from state officials that they didn't have the money they needed to ramp up a massive vaccination operation," focusing instead on $200 million the states had not yet spent, Stat reports. Vought was "obsessed" with the fact that states hadn't already spent the allocated by the Centers for Disease Control and Prevention, a Republican Senate aide told Stat, adding that even staunch fiscal conservatives in Congress knew states needed more than $200 million to inoculate 300 million Americans. But "much of the lobbying push came from Paul Mango, the former deputy chief of staff for policy at the Department of Health and Human Services," Stat reports, citing a Democratic congressional aide and Mango himself. "A lot of them had shut down their economies and they weren't getting tax revenue," Mango told Stat. "I'm sure they could use money — that's not in dispute — what's in dispute is whether they needed money given all they hadn't used to actually administer vaccines." The National Governors Association and the Association for State and Territorial Health Officials (ASTHO) both warned the Trump administration last fall that more funding was needed to prepare for the soon-to-be-approved vaccines, and former CDC Director Robert Redfield had asked Congress for $6 billion for the states' efforts. Mango told Stat that Redfield was "lobbying Congress for money behind our back" to "help their friends at the state public health offices." State health departments note they were not vaccinating anyone in October and said they were drawing down sources of money that were set to expire before tapping the $200 million, especially because it wasn't certain Congress would allocate anymore. Congress did approve $4.5 billion in December, but the funds didn't start arriving in states until January. Read more about the lobbying effort, what effect it may have had on the slow rollout, and the schism between the Trump political appointees and public health officials at Stat News. More stories from theweek.comRise of the Barstool conservativesEric Trump reportedly wagered Election Day that his father would win 320 electoral votesAmerica's overreaction syndrome

  • Hong Kong tycoon Jimmy Lai to wait for bail verdict in national security case

    Hong Kong media tycoon and Beijing critic Jimmy Lai, the most high-profile person charged under the national security law, will remain in custody after the city's top court said it would announce its verdict on his bail application at a later date. Lai had been in custody since Dec. 3, except for when he was released on bail for about a week late last year. His return to custody was related to Article 42 of the security law, which says that "no bail shall be granted to a criminal suspect or defendant unless the judge has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security".

  • ‘Trash’ that washed up on Texas beach isn’t garbage at all, officials say. What is it?

    “I see this all the time ... and never knew what it was!”

  • Iran state TV airs launch of new satellite-carrying rocket

    Iranian state TV on Monday aired the launch of the country's newest satellite-carrying rocket, which it said was able to reach a height of 500 kilometers (310 miles). The rocket, named Zuljanah for the horse of Imam Hussein, the grandson of the Prophet Muhammad, did not launch a satellite into orbit. The satellite carrier is 25.5 meters (84 feet) long and weighs 52 tons.

  • France and Germany mull sanctions on vaccine providers as EU row over delays escalates

    France and Germany threatened legal action against AstraZeneca on Sunday as they scrambled to explain their shortages in vaccine supplies and warned that any firm which favoured UK orders for the jabs would be penalised. Clement Beaune, the French Europe minister, threatened sanctions against the Anglo-Swedish firm, which produces the Oxford vaccine, if it emerged that Britain had been given priority. "If there is a problem and that other countries have been favoured - for example the UK over us - then we will defend our interests," Mr Beaune said on Sunday. "Contracts are not moral commitments, they are legal commitments. Penalties or sanctions can be triggered in every contract." It came as Berlin and Rome issued similar threats to vaccine providers, in the latest stage of a bitter row in Europe over delays in the production and delivery of Covid jabs. "If we find out that individual companies are not maintaining their side of the bargain then we'll have to make a decision on legal measures," Peter Altmaier, the German economy minister, told Die Welt newspaper. Mr Altmaier, a close confidant of Chancellor Angela Merkel, also warned vaccine producers that "it is in no way acceptable that another country is retrospectively favoured over the EU." AstraZeneca says it will deliver 4.6 million doses to France by the end of March, which is half the amount that was initially agreed upon. It has also significantly reduced its delivery targets for the EU for the first quarter of the year, leading to a furious response from Brussels, which accuses the company of offering preferential treatment to the UK. Among the sanctions being considered by France include withholding payments, cancelling subsequent orders and seeking compensation for a breach of contract. Mr Beaune said an investigation into vaccine deliveries to Britain by EU-based factories was already underway. As the third wave of coronavirus spreads across the continent, Emmanuel Macron, the French president, is resisting calls to impose a third lockdown and has instead tightened existing restrictions. "When you're French, you have everything you need to succeed providing you dare to try," he is said to have told ministers on Friday, though the refusal to declare a full lockdown went against his own scientific advisers' recommendations. Polish police launched tear gas and stun grenades over the weekend as they shut down illegal discos and parties in the cities of Wroclaw and Rybnik. As in other European cities, some businesses have opened for trade in defiance of the rules while protests over Covid restrictions have broken out in the Netherlands, Spain, France and Denmark. Dutch police arrested at least 30 people in Amsterdam on Sunday as they struggled to prevent a fresh outbreak of anti-lockdown rioting. Thousands of protesters also took to the streets of Vienna over the weekend, taking part in an anti-lockdown demonstration organised by a far-Right group. Similar scenes unfolded in Hungary where a group of 100 restaurants said they would reopen despite facing threats of heavy government fines. It also emerged over the weekend that Boris Johnson forced the EU into making two u-turns on vaccines after Brussels tried to prevent doses in a Belgian factory from reaching the UK, and moved to impose a hard border in Northern Ireland for the same purpose. During two phone calls with Ursula von der Leyen, the president of the European Commission, Mr Johnson is said to have persuaded the EU chief to abandon both proposals, the Mail on Sunday reported. Micheál Martin, the taoiseach (Irish prime minister), told the BBC on Sunday that they were "blindsided" by the EU threat to seal off the frontier. "The problem is the commission took the wrong mechanism in revoking Article 16 of the protocol to deal with it," he said, adding that there were "a lot of lessons to be learned" over vaccine supplies. On Sunday night, Ms von der Leyen announced on Twitter that the EU would ramp up vaccine supplies this week. "[AstraZeneca] will deliver 9 million additional doses in the first quarter (40 million in total) compared to last week’s offer & will start deliveries one week earlier than scheduled. The company will also expand its manufacturing capacity in Europe," she wrote.

  • West Virginia Gov. Calls for Large-Scale Stimulus: ‘If We Throw Away Some Money Right Now, So What?’

    West Virginia governor Jim Justice, a Republican, called for a large-scale economic relief bill on Monday in comments to CNN. Justice’s remarks came after Senator Joe Manchin (D., W.V.) called for targeted economic relief to tackle the fallout from the coronavirus pandemic. Manchin has dismissed the idea of sending out $2,000 stimulus checks to all Americans making less than $75,000 a year, calling instead for infrastructure projects “to put people back to work.” On Monday, however, Governor Justice indicated that he would not be overly concerned about the price tag of a new relief bill. “We need to understand that trying to be, per se, fiscally responsible at this point in time with what we’ve got going on in the country—if we actually throw away some money right now, so what?” Justice told CNN’s Poppy Harlow. “We have really got to move and get people taken care of, and get people back on balance.” Harlow pointed out that Senator Manchin has called for more targeted relief efforts, however Justice said he had not spoken to the senator regarding negotiations over the bill. “I don’t really know exactly what the thinking could possibly be there,” Justice said. “We got people who are really hurting, and that’s all there is to it.” **Republican** Governor of West Virginia @WVGovernor to me on Stimulus: “Trying to be per se fiscally responsible at this point in time with what we’ve got going on in the country, if we actually throw away some money right now, so what?” Has he talked to @Sen_JoeManchin? I ask. pic.twitter.com/s93QMWze3m — Poppy Harlow (@PoppyHarlowCNN) February 1, 2021 Justice’s remarks come several hours before President Biden is set to meet with ten Senate Republicans to discuss a compromise coronavirus relief bill. Senator Rob Portman (R., Ohio) told CNN that the compromise bill includes more targeted relief, with $1,000 checks to individuals making $50,000 or less, and would be less costly than the current $1.9 trillion bill proposed by Democrats. While Democrats could attempt to pass their proposal via budget reconciliation, allowing for a simple majority vote and eliminating the possibility of a GOP filibuster, the party would need all 50 of its senators to vote in favor of the measure. This means Manchin would need to agree to the proposal, as well as fellow moderate Kyrsten Sinema of Arizona.

  • Why the COVID-19 variants might stretch the pandemic into 2024

    Last week, New York provided a worrisome breakdown of what's happening in the Brazilian city of Manaus, whose population had previously been thought to have built up widespread protection against the virus last year, only to find itself experiencing another major outbreak. There are theories as to how this happened — community immunity being overestimated, waning antibody protection, the variant becoming more transmissible, or, perhaps most concerning, the virus adapting to evade antibodies. Whatever the case, an increasing number of variants like the one in Brazil could theoretically push the end game back. Axios put it in slightly different terms — the current pandemic may be nearly over, but the variants could spark new ones. Several vaccines have been shown to work well against the main coronavirus strain, and the more transmissible U.K. variant appears quite susceptible to them, as well, but the South African variant looks more resistant. And, New York notes, even a slight dip in efficacy could prevent "population-scale protection through vaccination alone." The New York Times, however, explains that reports on vaccine efficacy often don't tell the whole story. Scientifically speaking, vaccine research considers any transmission a failure, but that may not be the most important thing. Novavax and Johnson & Johnson provided data that showed their vaccine candidates did not stop infections in South Africa as well as they did elsewhere, but they were still very successful at preventing severe disease, hospitalizations, and death. That suggests a possible scenario in which vaccines reduce the coronavirus to a much milder pathogen. But that still may not be enough globally, per New York. Even if vaccines significantly reduce the worst COVID-19 outcomes, the world's poorer countries are not estimated to reach mass immunization until 2024, so while the tide may turn more quickly in the United States, the global pandemic could still be ongoing for years to come, especially if variants impede natural herd immunity. Read more at New York, Axios, and The New York Times. More stories from theweek.comRise of the Barstool conservativesEric Trump reportedly wagered Election Day that his father would win 320 electoral votesAmerica's overreaction syndrome

  • Drone video shows major damage after chunk of iconic California highway washes into ocean

    Part of Highway 1 in the Big Sur area collapsed after heavy rains and slid into the Pacific.

  • Biden redirecting Trump's $30 billion fund used for farmers impacted by trade war

    The Biden administration wants to use the Agriculture Department money to tackle climate change, support restaurants and kickstart other programs without waiting for Congress; Fox Business Network's Charles Payne reacts.

  • Sheriff: Hit men hired by accused rapist killed wrong women

    A Louisiana man facing rape charges tried to have his accuser killed, but two hit men instead ended up killing his sister and her neighbor, authorities said Monday. Neither Hope Nettleton, 37, nor Brittany Cormier, 34, was the person that the hit men had been hired to kill on Jan. 13, the Terrebonne Parish Sheriff’s Office said. On Friday, authorities arrested Andrew Eskine, 25, of Carencro; Dalvin Wilson, 22, of Rayne; and Beaux Cormier, 35, of Kaplan on charges of first-degree murder.

  • Oakland Chinatown Hit With Over 20 Attacks Targeting Elderly, Women in 2 Weeks

    Recent robberies and attacks have left store owners in Oakland's Chinatown concerned about the futures of their small businesses. A series of crimes: In the past two weeks, more than 20 businesses have suffered from thefts and attacks, ABC7 News reports. Carl Chan, the president of Oakland's Chinatown Chamber of Commerce, claims to have spoken with the store owners affected by the crimes.

  • Eric Trump reportedly wagered Election Day that his father would win 320 electoral votes

    Former President Donald Trump and those closest to him believed before Election Day that he would win a second term, "their views swayed by the assurances of pro-Trump pundits and the unscientific measure of the size and excitement of the president's rally crowds," The New York Times reports. Trump had laid the groundwork for a Plan B, arguing that he lost only because of a vast conspiracy of fraud, but he and his close circle didn't think he would need it, the Times reports: Flying home on Air Force One from the final campaign event in Grand Rapids, Michigan, in the early hours of Nov. 3., Mr. Trump's son Eric proposed an Electoral College betting pool. He wagered that the president would win at least 320 electoral votes, according to a person present for the exchange. "We're just trying to get to 270," an adviser more grounded in polling and analytics replied. [The New York Times] The Times did not report how much Eric Trump bet or whether he ever paid up. But watching returns come in on election night, Donald Trump "fell into enraged disbelief as his lead inexorably dissipated, even in formerly red states like Arizona," the Times reports. "Eric Trump goaded him on — a dynamic that would play out in the weeks to come." Read more about Trump's post-election machinations at The New York Times. More stories from theweek.comRise of the Barstool conservativesAmerica's overreaction syndromeRochester police seen pepper spraying handcuffed, screaming 9-year-old girl in body camera video

  • Climber sets off rockslide that sweeps him past friends to his death, CA officials say

    The climber stepped on a rock that moved and set off a rockslide, park officials said.