Stocks climb amid tech rally; treasuries advance: markets wrap

The dollar declined.
Image: Paul Yeung/Bloomberg

Asian stocks rose Tuesday as technology shares rallied and the prospect of solid corporate earnings helped counter concerns stemming from elevated inflation. The dollar declined.

MSCI Inc.’s Asia-Pacific equity index was at its highest since late September. Hong Kong outperformed and the city’s gauge of Chinese tech stocks surpassed its 50-day moving average. US and European futures were little changed after US stocks gained, with the Nasdaq 100 leading the way.

Treasury yields declined and a flattening in the yield curve paused. In Australia, the three-year bond yield was lower after the minutes from the central bank’s latest policy meeting put a dampener on early rate-hike bets.

In China, the focus is on debt-laden China Evergrande Group’s real-estate unit and its coupon payment due on a local bond.

Markets are taking some comfort from robust earnings but also grappling with the prospect of tightening monetary policy to quell price pressures. Traders are waiting to see if a slate of Federal Reserve speakers this week will try to calm the jitters stemming from the scaling back of pandemic-era policy support.

“The world is watching interest rates more closely than it has for some time — and rightly so, the moves have been emphatic, especially in the short-term maturities,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. He added it’s “impressive how resilient and calm markets are in the face of the rates repricing.”

The oil rally paused with prices around multiyear highs. A natural-gas shortage is spurring demand for products like fuel oil and diesel for power generation. Investors are paying close attention to the earnings season to see how higher costs for energy and raw materials are affecting margins.

“We are going to get a lot of information on whether margins are being squeezed by these shortages and higher prices and wages continuing to go up,” JoAnne Feeney, Advisors Capital Management partner and portfolio manager, said on Bloomberg Television. She added the delta-plus Covid variant could be among sources of volatility in the next few months.

Elsewhere, Bitcoin traded around $62 500. ETF issuer ProShares is preparing to launch its Bitcoin futures fund on the New York Stock Exchange on Tuesday.

Events to watch this week:

  • Earnings roll in, including from AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc.
  • Bank Indonesia rate decision and briefing, Tuesday.
  • China’s NPC Standing Committee starts a meeting Tuesday that goes on through Oct. 23. A review of anti-monopoly regulations is on the agenda.
  • US housing starts, Tuesday.
  • EIA crude oil inventory report, Wednesday.
  • China property prices, loan prime rates, Wednesday.
  • US Conference Board leading index, US existing home sales, jobless claims, Thursday.
  • Fed Chair Jerome Powell takes part in policy panel discussion, Friday.

Some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 1:14 p.m. in Tokyo. The S&P 500 rose 0.3%
  • Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1%
  • Japan’s Topix index increased 0.4%
  • Australia’s S&P/ASX 200 Index added 0.2%
  • South Korea’s Kospi index rose 0.7%
  • Hong Kong’s Hang Seng Index rose 1.2%
  • China’s Shanghai Composite Index added 0.7%
  • Euro Stoxx 50 futures rose 0.1%

Currencies

  • The Japanese yen was at 114.11 per dollar, up 0.2%
  • The offshore yuan traded at 6.4075 per dollar, up 0.3%
  • The Bloomberg Dollar Spot Index fell 0.3%
  • The euro was at $1.1651, up 0.4%

Bonds

  • The yield on 10-year Treasuries slipped two basis points to 1.58%
  • Australia’s 10-year bond yield was at 1.74%

Commodities

  • West Texas Intermediate crude was at $82.53 a barrel, up 0.1%
  • Gold was at $1,775.55, up 0.6%
© 2021 Bloomberg

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