(May 27): Asian stocks were mixed on Wednesday as investors weigh hopes for economic recovery against deepening US-China strains.
Futures on the S&P 500 fluctuated after the index closed at an 11-week high. Jamie Dimon, head of America’s biggest bank, counted himself among the optimists Tuesday, saying there could be a “fairly rapid recovery.” Data showed U.S. new-home sales unexpectedly rose in April. Treasuries and the dollar held the bulk of Tuesday’s losses. Stocks were up in Tokyo and Seoul, and flat in Shanghai and Sydney.
The S&P 500 gave up almost half its gains in the final half hour of trading Tuesday after a report that the Trump administration is considering sanctions on Chinese officials. The Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that would curtail the rights and freedoms of Hong Kong citizens, Bloomberg reported.
The recent equity rally “is an indication that investors are getting optimistic about the reopening of the economy and the drug-treatment development,” Katerina Simonetti, senior portfolio manager at UBS Private Wealth, said on Bloomberg TV. “We hope that it will eventually lead to a normalization in the market, but we have to keep an eye on the re-emergence of virus cases.”
Elsewhere, crude oil retreated and gold was steady.
Here are some key events coming up:
- Thursday brings the U.S. jobless claims reading for the week ended May 23.
- Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index rose 0.2% as of 10:38 a.m. in Tokyo. The gauge added 1.2% on Tuesday.
- Japan’s Topix index added 0.5%.
- South Korea’s Kospi index rose 0.4%.
- Australia’s S&P/ASX 200 Index was little changed.
- Hang Seng Index rose 0.2%.
- Shanghai Composite dipped 0.1%.
Currencies
- The Bloomberg Dollar Spot Index was steady after sinking 0.9%.
- The yen was at 107.56 per dollar.
- The offshore yuan held at 7.1470 per dollar.
- The euro bought US$1.0973.
Bonds
- The yield on 10-year Treasuries dipped to 0.69%.
- Australian 10-year yields ticked up to 0.90%.
Commodities
- West Texas Intermediate crude slid 0.8% to $34.06 a barrel.
- Gold was at US$1,715 an ounce.
