Asian stocks set for record high; dollar retreats: markets wrap

Asian stocks and US futures climbed on Monday, buoyed by positive sentiment on regional trade and signs of opposition to a national American lockdown despite surging virus cases. The dollar retreated.

The Asian benchmark was on track for a record close, with Japan and South Korea outperforming. A slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the globe’s population and gross domestic product. In Australia, share trading was suspended for the day due to a market data issue.

S&P 500 futures extended last week’s advance after advisers to President-elect Joe Biden said they opposed a nationwide US lockdown. Oil pushed higher and Treasuries were steady. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs. The tech-heavy Nasdaq 100 underperformed amid the rotation to economically sensitive industries.

Global stocks have recovered to pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, and more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world.

China remains a bright spot. Data showed the country’s economic recovery strengthened in October, with consumer spending picking up steadily and industrial production and investment rising faster than expected. The nation’s central bank added funds to the financial system to support growth.

The pandemic continues to escalate in regions such as Europe and the US American coronavirus cases have topped 11 million. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, the its economy minister said.

“We do see a positive stream of news going forward,” Sean Fenton, chief investment officer at Sage Capital Pty in Sydney, said on Bloomberg TV. “The market looking forward towards eventual reopenings, real yields probably bottoming out, and cyclical and value stocks doing better, I think that’s a momentum that will be carried through at least over the next three to six months if not longer.”

Meanwhile, US President Donald Trump plans several new hard-line moves against China in the remaining weeks of his term, according to Axios. Trump showed few signs of conceding the presidential election to Biden, while also hardly acting as if he was preparing for a second term.

Here are some events to watch out for this week:

• Brexit talks look set to continue as the UK and EU approach the latest deadline.
• Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Former Federal Reserve Chair Janet Yellen and Indian Prime Minister Narendra Modi are among the many speakers. Through November 19.
• OPEC+ Joint Ministerial Monitoring Committee meets Tuesday.
• US retail sales due Tuesday.
• Bank Indonesia rate decision Thursday.

These are some of the main moves in markets:

Stocks

• S&P 500 Index futures rose 0.9% as of 2:29 p.m. in Tokyo. The S&P 500 gained 1.4% Friday.
• MSCI Asia Pacific Index climbed 1.4%.
• Topix index rose 1.8%.
• Kospi index gained 1.9%.
• Hang Seng Index climbed 0.5%.
• Shanghai Composite Index rose 0.9%.
• Euro Stoxx 50 futures gained 0.9%.

Currencies

• The yen traded at 104.59 per dollar.
• The offshore yuan rose 0.3% to 6.5785 per dollar.
• The Bloomberg Dollar Spot Index fell 0.2%.
• The euro advanced 0.1% to $1.1850.
• The pound climbed 0.2% to $1.3220.

Bonds

• The yield on 10-year Treasuries was at 0.89%.
• Australia’s 10-year bond yield rose one basis point to 0.89%.

Commodities

• West Texas Intermediate crude jumped 1.4% to $40.70 a barrel.
• Gold was at $1,892.59 an ounce, up 0.2%.