Asia Stocks Set for Mixed Start on China Tech Risk: Markets Wrap

(Bloomberg) -- Asian stocks looked set for a mixed start Friday as Chinese technology shares struggle, contrasting with a rally in their U.S. counterparts that propelled Wall Street equities to a record high.

Australian shares and futures for Japan were steady, while Hong Kong contracts slid. A tumble in the likes of e-commerce firm Alibaba Group Holding Ltd. and video-streaming platform operator Bilibili Inc. hurt an index of U.S.-listed Chinese stocks. Alibaba slashed its outlook for fiscal 2022 revenue amid intensifying competition, dwindling consumer spending and regulatory curbs.

In the U.S., a clutch of megacap tech companies rose, helping to take the Nasdaq 100 and S&P 500 to new peaks in a choppy session ahead of Friday’s options expiration. U.S. futures climbed in early Asian trading.

Treasuries were little changed, while a dollar gauge remained on course for a fourth weekly advance. The latest Treasury bill auctions signaled investors are starting to demand more yield to hold the shortest-maturity debt, as the drama over lifting or suspending the U.S. debt ceiling returns.

Global stocks continue to hover near records, propped up by corporate earnings growth, particularly in the U.S. Such company performance has helped to cushion concerns about high inflation, monetary-policy tightening and slower economic prospects in China.

“You can come up with a very strong list of reasons why you shouldn’t be invested,” Kristen Bitterly, regional head of investments for North America at Citi Private Bank, said on Bloomberg Television. “The best way to combat that is really with the record-high profitability that we’ve seen and to recognize that not all parts of the market are created equal.”

UBS Global Wealth Management is optimistic about U.S. equities. The next six months could see the S&P 500 hitting 5,200 in an environment of reduced monetary stimulus and outperformance by cyclical companies, according to Chief Investment Officer Mark Haefele. That’s an advance of about 11% from current levels.

Lawmakers in the U.S. House of Representatives are due to vote on President Joe Biden’s approximately $2 trillion economic plan. The bill’s fate in the Senate is still uncertain.

Elsewhere, crude oil remained below $80 a barrel as the wait continues to see if the U.S. will join China in planning to tap strategic reserves. Gold pared its recent rally, and Bitcoin extended a slide, dropping below $57,000.

What to watch this week:

• Fed’s Richard Clarida and Mary Daly speak at Asia Economic Policy Conference. Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.1% as of 8:21 a.m. in Tokyo. The S&P 500 rose 0.3%
• Nasdaq 100 futures increased 0.1%. The Nasdaq 100 rose 1.1%
• Nikkei 225 futures were little changed
• Australia’s S&P/ASX 200 index rose 0.1%
• Hang Seng futures slid 1.5% earlier

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was at $1.1372
• The Japanese yen was at 114.26 per dollar
• The offshore yuan was at 6.3804 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.59%
• Australia’s 10-year bond yield rose four basis points to 1.83%

Commodities

• West Texas Intermediate crude rose 0.8% to $79.01 a barrel
• Gold was at $1,858.39 an ounce

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