Stock futures rise, dollar drops on stimulus hopes: markets wrap

Stock futures advanced and the dollar fell Thursday on signs of potential progress toward fresh US fiscal stimulus. The offshore yuan climbed, though holidays in Asian markets risked amplifying moves.

In Japan, the Tokyo Stock Exchange halted trading after its worst breakdown, exacerbating an already slow day for stock markets in Asia where China, Hong Kong, Taiwan and South Korea are closed for holidays. Shares in Australia and Singapore rose more than 1%. S&P 500 and European futures edged higher.

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A report said Treasury Secretary Steven Mnuchin bolstered the assistance previously offered by Republican negotiators. Mnuchin earlier said there had been no agreement on pandemic relief, though negotiations would continue. Treasury yields were steady.

Mnuchin said he and Nancy Pelosi “made a lot of progress in a lot of areas,” and the House speaker said talks with the Treasury secretary will continue. Mitch McConnell was pessimistic, saying the two sides remain “far apart” on the amount of spending.

The Democrats will nevertheless vote on their $2.2 billion proposal later in the day, although it has no chance in the Senate. President Donald Trump signed a stopgap funding bill, preventing a partial federal government shutdown.

Plans to cut jobs at companies from Goldman Sachs Group Inc. to Walt Disney Co. highlighted this week the ongoing fragility for businesses still adjusting to the pandemic.

New Jersey reported a rise in virus cases and the National Football League postponed a game for the first time after nine members of the Tennessee Titans were infected. In the Netherlands, the government urged citizens to wear masks amid further restrictions and the Czech Republic issued a 30-day state of emergency to stem a surge in cases.

“We’re looking at a volatile October coming into the elections,” Mariann Montagne, portfolio manager at Gradient Investments LLC, said on Bloomberg TV. “The dollar will continue to pullback a bit and that’s a function of the volatility here, the relative growth here versus abroad and there was actually some short covering that took place recently to give it some strength, but that was temporary.”

Here are some key events coming up:

  • The September US employment report on Friday will be the last before the November election.

These are the main moves in markets:

Stocks

  • S&P 500 futures climbed 0.5% as of 2:03 p.m. in Tokyo. The index rose 0.8% on Wednesday.
  • Euro Stoxx 50 futures rose 0.3%
  • Nikkei 225 futures in Singapore were up about 0.2%.
  • Australia’s S&P/ASX 200 Index advanced 1.5%.
  • Singapore’s Straits Times Index added 1.3%.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%.
  • The yen was at 105.46 per dollar.
  • The euro bought $1.1745, up 0.2%.
  • The offshore yuan gained 0.4% to 6.7562 per dollar.

Bonds

  • The yield on 10-year Treasuries ticked up to 0.69%.

Commodities

  • West Texas Intermediate crude added 0.1% to $40.26 a barrel.
  • Gold was at $1,893.75 an ounce, up 0.4%.
© 2020 Bloomberg

Source: moneyweb.co.za