Most Asian stocks rose Tuesday after the S&P 500 closed at a record high on the first trading day of 2022. Treasuries maintained losses.
Japan led an advance as more Asian markets traded after the new year break. The U.S. gains followed European stocks which hit unprecedented highs even as trading volumes remained light because of holidays. On Tuesday, U.S. futures were little changed.
Benchmark Treasury yields steadied after climbing across the curve. The yield on the 10-year note topped 1.60% in its worst start to a year since 2009 as investors braced for Federal Reserve interest-rate hikes in 2022. The dollar held gains.
Hong Kong shares edged higher after their worst start to a year since 2019. Chinese equities weakened as investors weigh the possibility of further policy easing with data showing that property companies saw sales drop last year.
Markets are anticipating an uptick in volatility. Investors are navigating headwinds from the omicron variant, supply-chain disruptions and more central banks winding back pandemic stimulus that propelled a third year of double-digit returns for equities.
U.S. December payroll data and minutes from the Fed’s meeting last month later this week may build a case for tightening to begin sooner.
“We expect 2022 to be far more challenging from an investment perspective,” Heather Wald, vice president at Bel Air Investment Advisors, said in an emailed note. “Rarely has a market delivered three consecutive years of double-digit returns, as we have seen from 2019-2021. With the Federal Reserve set to accelerate tightening and a fairly valued stock market, we anticipate more muted returns for the S&P next year but still expect equities to remain attractive versus other liquid asset classes.”
Among individual stocks, Tesla Inc. surged as the carmaker navigated supply-chain disruptions to report blowout deliveries for the fourth quarter. Apple Inc. gained, giving it a $3 trillion market value.
Elsewhere, crude oil in New York held gains to trade around $76 a barrel following news Libya’s crude output is expected to fall to the lowest in more than a year and ahead of an OPEC+ meeting on Tuesday to discuss production. Bitcoin hovered around $46,000.
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 10:51 a.m. in Tokyo. The S&P 500 rose 0.6%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1.1%
- Australia’s S&P/ASX 200 Index advanced 1.5%
- Hang Seng Index rose 0.2%
- Kospi index fell 0.3%
- Shanghai Composite Index fell 0.3%
Currencies
- The Japanese yen was at 115.39 per dollar
- The offshore yuan was at 6.3741 per dollar
- The Bloomberg Dollar Spot Index dipped 0.1%
- The euro traded at $1.1309
Bonds
- Australia’s 10-year bond yield increased nine basis points to 1.76%
- The yield on 10-year Treasuries held at 1.62%
Commodities
- Gold was at $1,805 an ounce, up 0.2%
- West Texas Intermediate crude was at $76.30 a barrel, up 0.3%
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