(July 1): Asian stocks were poised for a muted start to a new quarter, with investors assessing better-than-estimated US economic data amid concern over the coronavirus spread and Sino-American tensions.
Futures edged up in Japan and dipped in Australia, with Hong Kong closed for a holiday. S&P 500 contracts slipped after the gauge rounded out a 20% second-quarter surge. US consumer confidence posted its biggest increase since 2011. After the close of regular trading, FedEx Corp. soared as the economic bellwether used an efficiency drive and a surge in health-equipment deliveries to shore up earnings. Treasuries and the dollar fell. Gold traded near US$1,800 ($2,510.28) an ounce.
See: Gold futures edge closer to US$1,800 per oz on surge in Covid-19 cases
Investors are monitoring accelerating virus infections that threaten to set back reopenings and stall the economic recovery. New cases could rise to 100,000 a day if behaviours don’t change, infectious-disease expert Anthony Fauci said. Federal Reserve Chairman Jerome Powell stressed to Congress Tuesday that getting the coronavirus under control was vital as the U.S. economy rebounds.
“The downside has become more limited given how many investors missed the rebound, how many remain bearish and how much cash has been sitting on the sidelines,” wrote Esty Dwek, head of global market strategy for Natixis Investment Managers. “Coupled with abundant stimulus measures and liquidity, corrections are likely to be bought. That said, we remain prudent.”
US equities briefly pared gains Tuesday after the Federal Communications Commission designated Huawei Technologies Co. and ZTE Corp. as national security threats. Traders also monitored news that Hong Kong for the first time banned its biggest annual protest march, a decision attributed to outbreak-control measures that comes after Chinese lawmakers approved sweeping national security legislation for the former British colony.
Here are some key events coming up:
- The monthly U.S. jobs report will be released on Thursday.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.2% as of 7:55 a.m. in Tokyo. The gauge jumped 1.5% on Tuesday.
- Futures on Japan’s Nikkei 225 rose 0.3%.
- Futures on Australia's S&P/ASX 200 Index slipped 0.1%.
Currencies
- The yen was at 107.97 per US dollar.
- The offshore yuan traded at 7.0706 per US dollar.
- The Bloomberg Dollar Spot Index fell 0.2%.
- The euro bought US$1.1235.
Bonds
- The yield on 10-year Treasuries jumped about four basis points to 0.66%.
- Australia’s 10-year yield rose four basis points to 0.91%.
Commodities
- The Bloomberg Commodity Index advanced 1.1%.
- West Texas Intermediate crude added 1% to $39.70 a barrel.
- Gold was at US$1,781.65 an ounce.
