Stocks extend rally, futures climb; dollar dips: markets wrap

Most Asian stocks rose along with US and European futures Wednesday, extending a global rally as earnings roll in, optimism builds over US stimulus and concern about volatile retail trading eases. The dollar dipped.

Shares outperformed in South Korea and Japan. S&P 500 and Nasdaq 100 futures climbed after Alphabet Inc. and Amazon.com Inc. reported better-than-estimated revenue. US stocks earlier closed higher for a second session. Treasury yields edged up amid a move to fast track a US stimulus plan.

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Elsewhere, oil traded at its highest in over a year on tightening global supplies. Chinese equities fluctuated after the People’s Bank of China drained some funds from the financial system.

Investors have returned to buying shares as the speculative trades popular with Reddit crowds crumble, easing fears that they could lead to destabilising swings in the stock market. GameStop Corp. and AMC Entertainment Holdings Inc. tumbled Tuesday, while silver steadied Wednesday after a 10% slide from an eight-year high. Treasury Secretary Janet Yellen has summoned US financial regulators to discuss the recent market volatility.

Meanwhile, Senate Democrats Tuesday put President Joe Biden’s $1.9 trillion Covid-19 relief plan on a fast track to passage, increasing the likelihood it eventually passes on a party-line vote.

“The fact that markets have cooled down a bit with the retail-trading frenzy, that’s giving a little bit of optimism,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “Anytime there’s more stability to markets, there’s a breath of relief of all investors.”

Still, some urged caution. Bank of America Corp. strategists came out with a warning about rising bullishness, saying that a sentiment indicator is close to hitting a “sell” signal.

These are some key events coming up:

  • The EIA crude oil inventory report is due Wednesday.
  • The Bank of England sets rates on Thursday and an Indian central bank policy decision is due Friday.
  • The US January payrolls report is due Friday, providing a first look at hiring in 2021.

These are the main moves in markets:

Stocks

  • S&P 500 futures rose 0.5% as of 6:27 a.m. in London. The gauge increased 1.4% on Tuesday.
  • Topix index rose 1.3%.
  • Hang Seng Index was down 0.1%.
  • Shanghai Composite Index was little changed.
  • Australia’s S&P/ASX 200 Index rose 0.9%
  • Euro Stoxx 50 futures gained 0.5%.

Currencies

  • The Bloomberg Dollar Spot Index fell less than 0.1%.
  • The euro bought $1.2040.
  • The yen was at 105.03 per dollar.
  • The offshore yuan traded little changed at 6.4618 per dollar.

Bonds

  • The yield on 10-year Treasuries rose about one basis point to just over 1.10%.
  • Australia’s 10-year bond yield rose two basis point to 1.17%.

Commodities

  • West Texas Intermediate crude climbed 0.3% to $54.93 a barrel.
  • Gold was at $1,838.11 an ounce.
  • Silver futures added 1.7% to $26.84 after slumping 10% on Tuesday.
© 2021 Bloomberg

Source: moneyweb.co.za