Asian stocks, U.S. stock futures and treasury yields retreated Friday as investors scrutinized President-elect Joe Biden’s much-anticipated $ 1.9 billion Covid-19 assistance plan.
With few surprises to pull investors off guard, attention has been drawn to how much of the package will eventually pass through Congress, and a reminder that he wants to raise taxes. Biden’s proposal includes a wave of new spending, more direct payments to households, an expansion of unemployment benefits and an increase in vaccinations and virus testing programs.
S&P 500 futures have slipped after weak text and consumer stocks dragged the benchmark late in the Thursday session. Stocks fell in Japan, Hong Kong and South Korea, although rose higher in Australia. Xiaomi Corp. tumbled after the Trump administration blacklisted the Chinese smartphone maker for its military links, along with China National Offshore Oil Corp.
Elsewhere, Federal Reserve Chairman Jerome Powell has said policymakers will not act. interest rates unless it sees worrying signs of inflation. Oil has risen on the stimulus hope in New York to a new ten-month high in New York. Bitcoin traded around $ 39,000 as it continued to recover from this week’s rapid dip.
Biden se “US rescue plan ‘comes as deaths from coronavirus reach record levels and local governments rule out the expansion to stem the spread of the pandemic during the winter months. The proposal also requires a federal minimum wage of $ 15 and more eviction protection.
“It seems to have been at least that big,” said Ilya Spivak, Asia-Pacific chief strategist at DailyFX, referring to Biden’s stimulus plan. ‘The main question is how much it is in jeopardy to make it succeed. This is probably the next layer of speculative uncertainty on which markets are focused. Hence the muted reaction. ”
Investors discuss how high returns can rise before risky assets weaken. Traders betting on an economic recovery this year are tolerating high stock valuations, in part because they expect more U.S. fiscal spending and better control over the vaccination pandemic.
Powell said the time to raise rates was “not soon” and said policymakers would let the world know before deciding to buy bonds. His remarks further sharpened the yield curve, while break even rates climbed.
On the virus front, China recorded its first Covid-19 death since April as new clusters continued to expand. France has said it will extend stricter curfew measures across the country to curb the spread of the coronavirus.
Here are some key events:
Matthew O’Connor, analyst at Deutsche Bank’s US bank, looks at the earnings season, which begins with JPMorgan.
These are some of the key movements in markets:
Stocks
- S&P 500 futures fell 0.1% in Tokyo from 11:53 p.m. The benchmark lost 0.4% on Thursday.
- Japan’s Topix fell 0.5%.
- Hang Seng increased by 0.4%.
- Shanghai Composite climbed 0.5%.
- South Korea’s Kospi sank 1%.
- Australia’s S & P / ASX 200 index rose 0.3%.
Currencies
- The Bloomberg Dollar Spot Index added 0.1%.
- The yen was at 103.76 per dollar.
- The foreign yuan was 6,4651 per dollar.
- The euro bought $ 1.2156.
Effects
- The yield on 10-year treasury fell to 1.11%.
- The ten-year yield in Australia fell to 1.09%.
Commodities
- West Texas Intermediate crude oil changed little at $ 53.57 a barrel.
- Gold was at $ 1,852.23 per ounce, up 0.3%.
– With help from Dave Liedtka, Kamaron Leach and Claire Ballentine