Asian stocks slipped and Chinese shares pared a rally Thursday as traders weighed the implications for equities of the recent jump in Treasury yields. Crude oil extended its advance after a cold blast disrupted U.S. output.
China’s stock market, reopening after the Lunar New Year break, was one of the few bright-spots in Asia. S&P 500 futures edged up after the index closed flat. The Nasdaq ended lower Wednesday amid concern about the impact of higher yields on valuations. The dollar was steady.
Earlier, the 10-year Treasury yield briefly climbed as high as 1.33% before retreating. Crude oil advanced past $62. Bitcoin held above $52,000 a day after vaulting past that level for the first time.
The recent dramatic rise in bond yields has investors wondering afresh how high they can climb before spoiling the risk rally. That adds to concerns that speculative froth may be setting equities up for a fall. Still, with vaccines being rolled out and economic activity picking up around the world, investors continue to bet on share market gains while shifting more into cyclical stocks.
“We still are a really long way from the absolute level of yields really breaking the equity market,” Erin Browne, portfolio manager for multi-asset strategies at Pacific Investment Management Co., said on Bloomberg TV. Browne said she’s leaning more toward cyclical stocks that will benefit as economies emerge from the pandemic.
U.S. retail sales rose in January by the most in seven months, beating all forecasts, Commerce Department figures showed. Meanwhile, factory output rose by more than expected.
Federal Reserve officials didn’t see the conditions for reducing their massive asset-purchase program being met for “some time” at their January policy meeting, a record of the gathering released Wednesday showed.
These are some of the main moves in markets:
- S&P 500 futures rose 0.1% as of 12:19 p.m. in Tokyo. The S&P 500 Index was little changed.
- Japan’s Topix index fell 0.5%.
- Australia’s S&P/ASX 200 Index rose 0.3%.
- South Korea’s Kospi index fell 0.3%.
- Hong Kong’s Hang Seng Index declined 0.4%.
- Shanghai Composite Index added 1.2%.
- Euro Stoxx 50 futures climbed 0.4%.
- The yen traded at 105.85 per dollar.
- The offshore yuan was at 6.4396 per dollar.
- The euro traded at $1.2042.
- The Bloomberg Dollar Spot Index was little changed.
- The yield on 10-year Treasuries was at 1.28%.
- Australia’s 10-year bond yield fell three basis points to 1.37%.
- West Texas Intermediate crude gained 1.2% to $61.88 a barrel.
- Gold rose 0.5% to $1,784 an ounce.