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Stocks retreat, US futures rally; oil bounces: markets wrap

Oil prices rose above $64 a barrel on the anniversary of their plunge below zero.
Image: Noriko Hayashi/Bloomberg

Global stocks weakened from record highs Tuesday and struggled for direction as investors weighed corporate earnings and recent spikes in virus cases. Oil prices rose above $64 a barrel on the anniversary of their plunge below zero.

Shares were mostly lower in Asia, with the exception of South Korea and Hong Kong, where delivery giant Meituan raised $9.98 billion from a record top-up placement and a convertible bonds sale. US futures rallied after the S&P 500 Index fell overnight and the tech-heavy Nasdaq 100 Index underperformed. European contracts edged lower.

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A seventh-straight session of declines in the US dollar helped oil prices rally to their highest levels in a month. The commodity-linked Australian dollar outperformed Group-of-10 peers.

Investors are awaiting further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace. The bright spot in the latest reports was the first revenue gain for International Business Machines Corp. in eleven quarters. Even with this latest pullback in major indexes, and the latest grim news on the spread of Covid-19, global stocks are not far from record highs.

“We do think the market is a little overextended here,” Dave Sekera, chief US market strategist at Morningstar Investment Services, told Bloomberg TV, adding that broad US equities look about 5% overvalued. “Having said that we do still see value in a couple of areas, the value category being one.”

Meanwhile, China President Xi Jinping used a speech to the annual Boao Forum Tuesday to pledge cooperation on global challenges from climate change to the pandemic, and called on the US and its allies to avoid “bossing others around.”

Here are some key events to watch this week:

  • Apple’s first product unveiling of the year on Tuesday.
  • EIA crude oil inventory report on Wednesday.
  • European Central Bank rate decision and President Christine Lagarde briefing on Thursday.
  • US releases new home sales data

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were up 0.2% as of 7:30 a.m. in London. The S&P 500 fell 0.5%. The Nasdaq 100 dropped 1%
  • Japan’s Topix Index slid 1.6%
  • The Shanghai Composite was flat
  • Hong Kong’s Hang Seng Index was steady
  • Korea’s Kospi Index gained 0.7%
  • Australia’s S&P/ASX 200 Index slipped 0.7%
  • Euro Stoxx 50 futures were down 0.1%

Currencies

  • The yen slipped 0.1% to 108.31 per dollar
  • The offshore yuan was up 0.3% at 6.4916 per dollar
  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was 0.1% higher at $1.2052

Bonds

  • The yield on 10-year Treasuries gained two basis points to 1.62%

Commodities

  • West Texas Intermediate crude rose 1.1% to $64.08 a barrel
  • Gold was down 0.2% at $1 768.03 an ounce
© 2021 Bloomberg

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