Asian stocks, U.S. equities futures and Treasury yields retreated on Friday as investors examined Covid-19’s long-awaited $ 1.9 trillion relief plan from President-elect Joe Biden.
With few surprises to surprise investors, the focus was on the amount of the package that Congress will eventually approve and a reminder that it wants to raise some taxes. Biden’s proposal includes a wave of new spending, more direct payments to households, an expansion of unemployment benefits and an expansion of vaccination and virus testing programs.
S&P 500 futures fell after weakness in technology and consumer stocks dragged down the benchmark from Thursday’s session. Stocks fell in Japan, Hong Kong and South Korea, although they rose in Australia. Xiaomi Corp. fell 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 said policymakers will not increase interest rates unless they see worrying signs of inflation. Oil rose to a new high of ten months in New York in hopes of stimulus. Bitcoin traded around $ 39,000 as it continued to recover from this week’s rapid collapse.
Biden is “American Rescue Plan ”arrives when coronavirus deaths reach record levels and local governments extend blockades to curb the spread of the pandemic during the winter months. The proposal also calls for a federal minimum wage of $ 15 and more protections against evictions.
“It looks like this was already priced at least in terms of magnitude,” Ilya Spivak, AsiaFX’s Asia Pacific strategist, said in reference to Biden’s stimulus plan. “The main question is how much is committed to achieving this. This is probably the next layer of speculative uncertainty on which markets focus. Hence the silenced response. “
Investors are debating how high yields can increase before the rise in risky assets is reduced. Traders betting on an economic recovery this year tolerate high equity valuations, in part because they expect more U.S. tax spending and better control of the vaccine pandemic.
Powell said the time to raise rates is “soon” and said policymakers “will let the world know” well in advance of the decision to cut bond purchases. His comments further increased the profitability curve while balance rates went up.
As for the virus, China recorded its first Covid-19 death since April, as new clusters continued to expand. France said it would extend tighter curfews across the country to try to stop the spread of the coronavirus.
Here are some key events:
Deutsche Bank U.S. banking analyst Matthew O’Connor is advancing the profit season, which begins with JPMorgan.
These are some of the main movements in the markets:
Stocks
- The S&P 500 futures fell 0.1% at 11:53 a.m. in Tokyo. The indicator lost 0.4% on Thursday.
- Japan’s Topix fell 0.5%.
- Hang Seng rose 0.4%.
- Shanghai Composite rose 0.5%.
- Kospi, South Korea, sank 1%.
- The Australian S & P / ASX 200 index rose 0.3%.
Coins
- The Spot Bloomberg Dollar index added up 0.1%.
- The yen was at 103.76 per dollar.
- The offshore yuan remained at $ 6.4651.
- The euro bought $ 1,2156.
Good
- The 10-year Treasury yield fell to 11.11%.
- Australia’s ten-year yield fell to 1.09%.
Commodities
- West Texas crude oil changed little, with $ 53.57 a barrel.
- Gold stood at $ 1,852.23 an ounce, up 0.3%.
– With the assistance of Dave Liedtka, Kamaron Leach and Claire Ballentine