(June 17): Asian stocks were mixed as investors weighed the recent rally in risk assets alongside evidence of a U.S. economic recovery and lingering concern over further coronavirus outbreaks. The dollar steadied following gains.
Japanese shares gave back a sliver of their surge of more than 4% on Tuesday and Korean equities slipped, while those in Australia edged higher. S&P 500 futures swung in early Wednesday trading after U.S. equities closed higher. Treasury yields kept this week’s gains. Data showed U.S. retail sales jumped by the most on record and Federal Reserve Chairman Jerome Powell said the U.S. economy may be bottoming out but still has a long way to go before it reverses the substantial damage done by the pandemic.
Investors took encouragement in recent days from Trump administration preparations for a nearly US$1 trillion (S$1.39 trillion) infrastructure proposal as part of its push to spur the world’s largest economy back to life as well as the Fed starting to buy individual corporate bonds.
Meantime, Florida reported that new cases rose to the highest level since the pandemic began and Texas saw hospitalizations surge. Elsewhere, Beijing shut its schools on concern about new infections.
“There is so much uncertainty right now and it looks to us like the market has really gotten ahead of itself, and that concerns us,” Sandi Bragar, a managing director at Aspiriant LLC, said on Bloomberg TV. “We are in the early stages of this and we are concerned the recovery is going to be long and slow so we are taking a cautious approach to our clients’ portfolios.”
Elsewhere, oil dipped back below US$38 a barrel in New York.
These are some key events coming up:
- The New York Stock Exchange may allow a limited number of market makers to return to its trading floor Wednesday.
- Policy decisions from the Bank of England and the Swiss National Bank are due on Thursday.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 Index advanced 0.1% as of 9:01 a.m. in Tokyo. The index rose 1.9% on Tuesday.
- Japan’s Topix index fell 0.1%.
- South Korea’s Kospi index slid 0.2%.
- Australia’s S&P/ASX 200 Index rose 0.2%.
Currencies
- The yen was at 107.39 per dollar, down 0.1%.
- The offshore yuan held at 7.0811 per dollar.
- The euro bought $1.1265, little changed.
Bonds
- The yield on 10-year Treasuries stayed at about 0.76%.
- Australia’s 10-year yield remained at 0.92%.
Commodities
- West Texas Intermediate crude slid 1.4% to $37.83 a barrel.
- Gold was at $1,726.49 an ounce.
