Asian equities retreated with US futures and Chinese equities reduced holiday earnings gains as traders weighed in on the implications of the recent jump in Treasury yields. Oil has expanded its lead amid the cold explosion that is disrupting US production.
Shares in South Korea and Hong Kong performed poorly, while those in China, reopened after the Lunar New Year break, gave up previous gains. The S&P 500 futures retreated after the index closed flat and European contracts were slightly changed. Nasdaq ended lower on Wednesday amid concerns about the impact of higher yields on valuations of technology stocks. The dollar has changed little.
The yields of the reference Treasury were constant after rising to 1.33% on Wednesday and then retreating. Oil hit $ 62 a barrel. Bitcoin held over $ 52,000 a day after crossing this level for the first time.
The recent dramatic rise in bond yields has made investors wonder again how high they can climb before ruining the risk rally. This adds to concerns that speculative foam could create stocks for a fall. However, with the launch of vaccines and the relaunch of economic activity around the world, investors continue to bet on earnings in the stock market, while switching more to cyclical stocks.
“An upward trend in Treasury yields remains in place as investors bet on the US economic recovery as vaccinations continue,” said Eiichiro Miura, general manager of the fixed-income department at Nissay Asset Management Corp. from Tokyo. “US equities have fallen slightly, but we cannot say that the sense of risk has returned, as commodity prices, including crude, have remained strong.”
US retail sales rose the most in January in seven months, exceeding all expectations, according to Department of Commerce figures. Meanwhile, factory production has grown more than expected.
Federal Reserve officials did not see the conditions for reducing their massive program of buying assets held for “some time” at the January policy meeting, a report of the assembly published on Wednesday said.
Read: Bond Selloff raises the debate about the breaking point for stocks
Gina Martin Adams, chief stock strategist at US Bloomberg Intelligence, talks about earnings, inflation and the US economy.
These are some of the main movements in the markets:
Inventories
- The S&P 500 futures fell 0.2% since 6 a.m. in London. The S&P 500 index has changed slightly.
- Japan’s Topix index fell 1%.
- The Australian S & P / ASX 200 index was flat.
- The Kospi index in South Korea fell by 1.2%.
- Hong Kong’s Hang Seng Index fell 1.2%.
- The Shanghai Composite Index added 0.7%.
- Euro Stoxx 50 futures have changed little.
currencies
- The yen traded at 105.88 per dollar.
- The offshore yuan was $ 6,4437.
- The euro was trading at 1.2046 USD.
- The Bloomberg Dollar Spot index has changed slightly.
BONDS
- The yield on the 10-year Treasury was 1.27%.
- Australia’s 10-year bond yield fell three basis points to 1.37%.
commodities
- West Texas Intermediate Oil gained 1% to $ 61.74 a barrel.
- Gold rose 0.4% to $ 1,783.42 an ounce.
– With the assistance of Joanna Ossinger and Adam Haigh