Stocks prices Slip as Treasuries Slip, Tech Falls, Crude Up. Most Asian stocks fell Monday with U.S. equity futures as higher Treasury yields tempered optimism over the economic growth outlook and President Joe Biden’s $1.9 trillion pandemic relief plan. Crude oil jumped.
Japanese shares fluctuated and Chinese equities slid. Technology stocks struggled and Nasdaq 100 futures underperformed. Ten-year Treasury yields remain in focus, ticking up along with the dollar. On Friday, U.S. stocks rebounded and the 10-year yield touched 1.6% after jobs data beat estimates.
Oil surged after Saudi Arabia said the world’s largest crude terminal was attacked, though output seemed to be unaffected. Meanwhile, the U.S. spending plan moves to the House after the Senate passed the legislation. The bill’s progress and strong Chinese export data bolstered economic prospects.
At the same time, the rise in long-term borrowing costs is spurring questions about equity valuations, especially for high-growth tech stocks. Treasury yields are rising because of a much stronger economic outlook, Federal Reserve officials said Friday, playing down the need for a monetary policy response.
“You will see a lot of volatility in markets,” Kim Stafford, Asia Pacific head at Pacific Investment Management Co., said on Bloomberg Television. “We believe that confidence is improving, especially with vaccines coming online, so we will see an uptick in growth globally. There are a lot of reasons to be confident in the market but a lot of this is also priced in.”
Here are some key events to watch:
- The annual session of China’s National People’s Congress continues in Beijing.
- Japan GDP is due Tuesday.
- EIA crude oil inventory report is due Wednesday
- The U.S. February consumer price index will offer the latest look at price pressures Wednesday.
- The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.
These are some of the main moves in markets:
- S&P 500 futures fell 0.3% as of 1 p.m. in Tokyo. The S&P 500 rose 2% Friday.
- Japan’s Topix index slipped 0.1%.
- Australia’s S&P/ASX 200 Index rose 0.7%.
- Hong Kong’s Hang Seng Index shed 1.3%.
- Shanghai Composite Index lost 1%.
- Euro Stoxx 50 futures rose 0.8%.
- The yen slipped 0.1% to 108.43 per dollar.
- The offshore yuan was trading at 6.5232 per dollar.
- The Bloomberg Dollar Spot Index added 0.1%.
- The euro was at $1.1902.
- The yield on 10-year Treasuries rose two basis points to 1.58%.
- Australia’s 10-year bond yield fell seven basis points to 1.76%.
- West Texas Intermediate crude climbed 2.1% to $67.50 a barrel.
- Gold rose 0.3% to $1,705.93 an ounce.