(Sept 2): Asian stocks looked poised for a mixed start despite another record high for their U.S. peers as tech shares advanced and investors snapped up work-from-home winners.
Futures rose in Japan and Australia, and declined in Hong Kong. S&P 500 contracts were little changed after gains in Apple Inc. again pulled the benchmark to an all-time high. Zoom Video Communications Inc. earlier led a rally in companies well positioned for stay-at-home orders. The dollar erased losses as data showed U.S. manufacturing expanded last month at the fastest pace since 2018. The euro retreated after breaching US$1.20 for the first time in over two years. Treasury yields fell.
Global stocks are continuing to grind higher as investors anticipate more support from policy makers, with last week’s announcement from the Federal Reserve that the central bank will maintain an easy-money policy adding fuel to the trade. Meanwhile, the U.S. manufacturing expansion on Tuesday came after Chinese factory data signaled rising global demand for exports, a sign the world economy is recovering from the pandemic.
“The big theme right now is the unrelenting, record-breaking rally in tech stocks,” said Candice Bangsund, portfolio manager of global asset allocation at Fiera Capital Corp. “The landscape for stocks is great but there’s still, from a macro perspective, a lot of unknowns as to the progression of the virus and, of course, the implications for global growth.”
On the virus front, Texas may lift restrictions on businesses as soon as next week, while New York City delayed the start of its school year by almost two weeks after teachers said they would consider striking if health and safety measures weren’t in place.
Meantime, Treasury Secretary Steven Mnuchin said the U.S. economy urgently needs additional fiscal stimulus to fully rebound from the Covid-19 crisis, and he initiated a conversation with House Speaker Nancy Pelosi amid stalled negotiations on a relief package.
Elsewhere, crude oil climbed above US$43 a barrel as the pickup in economic activity in the U.S. and China signaled a pronounced recovery in crude consumption.
Here are some key events to watch this week:
Australia GDP is due Wednesday.
U.S. jobless claims for the week ended Aug. 29 are due Thursday.
U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.
Here are the main market moves:
S&P 500 futures were little changed as of 7:15 a.m. in Tokyo. The index rose 0.8% on Tuesday.
Futures on Japan’s Nikkei 225 advanced 0.3%.
Hang Seng futures earlier slipped 0.4%.
Futures on Australia’s S&P/ASX 200 Index climbed 0.4%.
The Bloomberg Dollar Spot Index was flat.
The yen was at 105.96 per dollar.
The euro bought US$1.1917.
The offshore yuan traded at 6.8367 per dollar.
The yield on 10-year Treasuries fell three basis points to 0.67%.
West Texas Intermediate crude rose 0.6% to US$43.01 a barrel.
Gold was at US$1,970.46 an ounce.