Asian Stocks Mixed as Traders Weigh China Data: Markets Wrap

(Bloomberg) -- Asian stocks were mixed Monday as traders weighed better than expected Chinese economic data. Treasuries were steady, bringing some respite from volatility caused by inflation and monetary policy concerns.

Shares fluctuated in Hong Kong and China, where the central bank supported growth by rolling over all the policy loans falling due this month. Japanese equities gained as plans for stimulus helped to soften the blow of an economic contraction last quarter. U.S. futures pushed higher after technology shares bolstered the S&P 500 on Friday. 

The Chinese figures showed retail sales beat estimates despite widespread Covid-19 outbreaks. Another report indicating home prices fell for a second month sapped real-estate shares.

Treasuries were steady following a period of pronounced swings amid uncertainty about the pandemic recovery, whether inflation will be sticky and the likely speed of interest-rate hikes. Bond-market expectations for inflation over the coming decade are the highest since 2006. The dollar slipped.

Recent gyrations in bonds point to the worry that central banks will have to tighten policies more quickly than expected to curb sustained inflation. In contrast, global stocks near record levels signal equity investors are reassured by corporate strength and arguments that price pressures are transitory.

“We’ve seen inflation prints that we haven’t seen in decades,” Terri Jacobsen, UBS Private Wealth Management managing director, said on Bloomberg Television. She added equities can continue rallying as global supply chain issues are resolved and corporate earnings stay strong, with the Federal Reserve staying patient on policy tightening.

Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank shouldn’t overreact to elevated inflation even as it causes pain, because it is likely to prove temporary. Treasury Secretary Janet Yellen said controlling the Covid-19 virus in the U.S. is the key to easing price pressures.

Elsewhere, President Joe Biden will meet virtually with Chinese President Xi Jinping on Monday. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of U.S. technology to China. 

Meanwhile, Elon Musk raised the idea of selling more of his Tesla Inc. shares in online sparring with U.S. Senator Bernie Sanders. Musk offloaded almost $7 billion worth of Tesla stock over the past week, weighing on the shares of the electric-vehicle manufacturer.

Oil fell as traders wait to see what Biden might do to alleviate gasoline prices amid growing criticism about the impact of rising costs. Senate Majority Leader Charles Schumer urged the president to tap the U.S. government’s reserves of emergency fuel.

What to watch this week:

• China October property prices, retail sales, industrial production. Monday
• President Joe Biden, President Xi Jinping to meet virtually. Monday
• Fed Presidents Thomas Barkin, Esther George, Raphael Bostic, Patrick Harker speak at various events. Tuesday
• Reserve Bank of Australia Governor Philip Lowe delivers a speech Tuesday
• RBA minutes of November meeting. Tuesday
• U.S. retail sales are poised to show an acceleration in October as consumer demand remains resilient. Tuesday
• Euro zone CPI. Wednesday
• Conference Board U.S. leading index, initial jobless claims. Thursday
• Fed’s Richard Clarida and Mary Daly speak at Asia Economic Policy Conference. Friday

For more market analysis, read our MLIV blog.

Stocks

• S&P 500 futures rose 0.1% as of 11:05 a.m. in Tokyo. The S&P 500 rose 0.7%
• Nasdaq 100 futures added 0.2%. The Nasdaq 100 rose 1%
• Japan’s Topix index rose 0.4%
• Australia’s S&P/ASX 200 Index climbed 0.3%
• South Korea’s Kospi rose 1.1%
• Hong Kong’s Hang Seng Index was flat
• China’s Shanghai Composite Index lost 0.3%

Currencies

• The Japanese yen was at 113.81 per dollar
• The offshore yuan traded at 6.3759 per dollar
• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was at $1.1459

Bonds

• The yield on 10-year Treasuries fell one basis point to 1.55%
• Australia’s 10-year bond yield fell two basis points to 1.77%

Commodities

• West Texas Intermediate crude fell 0.7% to $80.24 a barrel
• Gold was at $1,859.62 an ounce, down 0.3%

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