Rise in stocks and equity futures with dollar marginally down

New York — US and European equity futures pushed higher with most Asian stocks Monday after President Donald Trump signed a coronavirus stimulus package. The dollar ticked lower with Treasuries.

S&P 500 contracts climbed after Trump backed down from last-minute demands and approved the combined $2.3-trillion Covid-19 relief and government funding package. Shares advanced in Tokyo and Seoul, and fluctuated in Hong Kong and Shanghai. The Bloomberg dollar spot index dipped and Treasury yields climbed. Oil was little changed, while gold headed for its highest close in seven weeks.

Alibaba Group Holding slid in Hong Kong despite boosting its share buyback programme to $10bn, amid continued concern over China’s inquiry into alleged monopolistic practices. Chinese regulators at the weekend ordered affiliate Ant Group to return to its roots as a provider of payments services, a development that threatens to clip its growth.

Elsewhere, the pound fluctuated after the UK last week clinched a historic Brexit trade deal with the EU.

The signing of the US legislation averts a further delay in stimulus and bolsters some of the optimism that drove global stocks to a record in December. In approving the bill, Trump also demanded a vote in Congress to replace the planned $600 in direct stimulus payments with $2,000 — a nonbinding request that is unlikely to pass both chambers.

The stimulus “could be supportive of the market, supportive of the US economy”, said Suresh Tantia, strategist at Credit Suisse. “Next year all the building blocks are there for markets to continue this rally.”

On the coronavirus front, more restrictions are being imposed to fight the spread of the new, more infectious strain. Japan is among the latest to act, banning the entry of most foreigners through the end of January. Meanwhile, the EU kicked off a continentwide vaccination campaign less than a week after clearing a shot developed by Pfizer and BioNTech SE.

In cryptocurrencies, Bitcoin kept rallying over the festive break, surging past $28,000 for the first time before retreating.

These are the main moves in markets: S&P 500 futures rose 0.6% as of 2.32pm in Tokyo. Japan’s Topix rose 0.3%.South Korea’s Kospi climbed 0.3%. The Hang Seng index was little changed. The Shanghai Composite index rose 0.1%.

The yen slid 0.1% to 103.52 per dollar. The euro rose 0.2% to $1.2215. The pound was little changed at $1.3565. The offshore yuan was at 6.5219 per dollar, down 0.2%. The Aussie was little changed at 76.09 U.S. cents.

The yield on 10-year Treasuries rose about two basis point to 0.94%.

Bloomberg