Stocks Set for Steady Start; Dollar Stays Lower: Markets Wrap
(Bloomberg) -- Asian stocks looked set for a steady start Thursday after a mixed Wall Street session, as investors weighed corporate earnings, elevated inflation and risks from China’s property sector.
Australian shares edged up, while futures for Japan and Hong Kong were little changed and U.S. contracts wavered. The S&P 500 rose to the cusp of a record but the tech-heavy Nasdaq 100 dipped. Tesla Inc.’s revenue fell short of estimates but third-quarter profit beat projections despite semiconductor and supply-chain challenges.
In Treasuries, long-end yields climbed in part on a soft 20-year auction, while two-year yields dropped as traders reassessed rate-hike prospects.
The dollar held a drop, crude oil pushed higher and Bitcoin was around $66,000 after setting an all-time high. Traders will be monitoring cash-strapped developer China Evergrande Group, which terminated talks to sell its property-management arm and asked for its shares to resume trading.
Corporate results have helped to temper but by no means eliminate worries that cost pressures -- stoked by an energy crunch and supply-chain snarls -- will slow the pandemic recovery. At the same time, investors are grappling with the prospect of reduced central bank support and remain wary of the travails in China’s real-estate sector.
In the latest Federal Reserve comments, Governor Randal Quarles said he favors an initial move to slow monetary stimulus next month and is concerned by a broadening of inflationary pressures that could require a policy response.
The Fed is “trapped in a very difficult situation,” David Kudla, chief executive officer at Mainstay Capital Management, said on Bloomberg Television. That’s because of the possibility of reduced stimulus followed by rate hikes amid a significant slowing of economic expansion, he said.
Meanwhile, the U.S. Food and Drug Administration cleared the way for Moderna Inc. and Johnson & Johnson Covid-19 booster shots. Russia is among countries stepping up virus restrictions to curb surging infections.
For more market analysis, read our MLIV blog.
Events to watch this week:
- U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday
- Fed Chair Jerome Powell takes part in policy panel discussion, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures dipped 0.1% as of 8:23 a.m. in Tokyo. The S&P 500 rose 0.4%
- Nasdaq 100 contracts fell 0.2%. The Nasdaq 100 fell 0.1%
- Nikkei 225 futures were flat
- Australia’s S&P/ASX 200 Index was steady
- Hang Seng Index futures were little changed
Currencies
- The Japanese yen was little changed at 114.37 per dollar
- The offshore yuan was at 6.3928 per dollar
- The Bloomberg Dollar Spot Index was little changed
- The euro was at $1.1653
Bonds
- The yield on 10-year Treasuries rose two basis points to 1.66%
- Australia’s 10-year bond yield was at 1.82%
Commodities
- West Texas Intermediate crude was at $83.73 a barrel, up 0.4%
- Gold was at $1,782.17 an ounce
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