Asian stocks set to decline; treasuries advance: markets wrap

Asian stocks looked poised to track US shares lower as investors awaited the conclusion of the Federal Reserve’s policy meeting. Treasuries climbed and the dollar steadied.

Futures declined in Japan, Hong Kong and Australia. S&P 500 contracts were little changed after the benchmark closed lower, with worse-than-estimated results from McDonald’s Corp., 3M Co. and Harley-Davidson Inc. weighing on shares. Pfizer Inc. climbed after the drugmaker raised its earnings forecast and began a later-stage trial for a coronavirus vaccine with its German partner. Gold held near $1,960 an ounce.

With some of the world’s largest companies reporting earnings this week, investors are looking for clues on whether a resurgence of Covid-19 around the world will derail a recovery in earnings and the economy. A drop in US consumer confidence added to evidence that the pace of the rebound is cooling as the virus interrupts reopenings in several states.

Meanwhile, the Fed extended most of its emergency lending programs by three months, through the remainder of 2020. The US central bank is set to announce its rate decision Wednesday, and the market anticipates a dovish statement.

“There’s enough stimulus and support in the market from a monetary policy perspective, but also from fiscal, and that keeps a nice floor under the market,” said Amanda Agati, chief investment strategist for PNC Financial Services Group. “But we also think it’s going to be very difficult to make a lot of forward progress in this environment.”

Elsewhere, oil steadied after an overnight decline as investors shifted their focus to domestic supply, with expectations for another build in already swelling US stockpiles.

Here are some key events coming up:

• The Federal Open Market Committee’s announcement is due on Wednesday.
• Earnings include Rio Tinto and Barclays on Wednesday; Thursday brings Apple, Amazon.com, Alphabet, L’Oreal, Credit Suisse and Samsung; Chevron and Caterpillar are set for Friday.
• US second-quarter GDP is expected on Thursday.
• China PMI data comes Friday.

These are some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.1% as of 7:08 a.m. in Tokyo. The index decreased 0.6%.
• Futures on Japan’s Nikkei 225 declined 0.3%.
• Hang Seng Index futures slid 0.1%.
• Futures on Australia’s S&P/ASX 200 Index lost 0.4%.

Currencies

• The Bloomberg Dollar Spot Index was flat.
• The euro bought $1.1722.
• The yen was at 105.05 per dollar.
• The offshore yuan traded at 7.0053 per dollar.

Bonds

• The yield on 10-year Treasuries declined about four basis points to 0.58%.

Commodities

• West Texas Intermediate crude added 0.1% to $41.11 a barrel.
• Gold was at $1,960.01 an ounce, up 0.1%.

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