Asian stocks were mixed and U.S. equity futures were steady Monday amid a mood of caution as traders evaluated spiking coronavirus cases and a weekend pledge of greater economic support from China’s central bank.
Shares declined in Japan and fluctuated in China, while S&P 500 and Nasdaq 100 contracts edged up following an all-time high for U.S. stocks on Thursday before the Christmas break.
The U.S. 10-year Treasury yield slipped, West Texas Intermediate crude fell and gold retreated. A dollar gauge ticked higher.
Reports indicated new daily U.S. infections with the omicron virus variant have surpassed those in the delta wave, while China posted the highest number of local cases since January. The pathogen is causing disruption, including the cancellation of almost 2,400 flights over the holiday weekend in the U.S.
In China, the central bank on Saturday pledged greater support for the real economy and said it will make monetary policy more forward-looking and targeted, amid expectations of easing as a property slowdown saps growth.
High Flying
China’s possible policy loosening contrasts with steps by the Federal Reserve and other central banks to fight high inflation by scaling back stimulus. The outlook for monetary policy, the virus and company earnings are shaping thinking about whether global stocks can keep rising after nearly doubling from pandemic lows.
Beijing’s signal of a “more forceful policy approach toward getting growth back on the right track” makes “us considerably more constructive on the Chinese economy and onshore equities market heading into 2022,” said David Chao, global market strategist for Asia Pacific ex-Japan at Invesco.
Chinese regulators also plan tighter scrutiny of overseas share sales by domestic firms and intend to ban those that could pose a national security threat, Beijing’s latest step to crack down on listings abroad.
On the virus front, Anthony Fauci, President Joe Biden’s top medical adviser, said Americans should stay vigilant against the omicron variant despite evidence its symptoms may be less severe because the volume of cases can still overwhelm hospitals.
Meanwhile, Vice President Kamala Harris said the Biden administration is seeking a path forward for its “Build Back Better” economic stimulus. In Turkey, President Recep Tayyip Erdogan said the nation has abandoned interest-rate hikes as a tool to control price pressures.
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