US futures gain with Asia stocks; silver surges: markets wrap

US equity futures reversed declines and Asian stocks climbed Monday as concern receded over volatile retail trading and signs of an easing cash crunch in China aided sentiment. Silver futures surged.

S&P 500 contracts reversed an earlier drop of more than 1% to trade higher with European futures. Traders fretting about the implications of short-squeezes stirred up on internet forums helped push US shares lower on Friday. Silver futures advanced 6% after the metal became the latest focus of such chatter.

Stocks in South Korea and Hong Kong outperformed. The onshore yuan slipped and Chinese stocks fluctuated after the People’s Bank of China injected funds in an effort to avoid a liquidity squeeze. The dollar edged lower and the yield on 10-year Treasuries ticked higher.

Global stocks retreated last week as retail trading caused havoc in some US shares and a patchy vaccine rollout raised risks for the global recovery from the pandemic. Data showed factory activity across much of Asia continued to hold up in January even as China’s output showed signs of moderating.

Silver spiked after retail sites were overwhelmed with demand for bars and coins at the weekend. Comments on Reddit forum r/WallStreetBets suggested people buy exchange-traded funds linked to the metal because prices have been kept artificially low.

“Risk sentiment is trying to return to its typical bias,” Steve Innes, chief market strategist at Axi, said. “The street is gingerly buying back those positions that got squeezed out last week after deleveraging ran roughshod over the market. So after a weekend to figure out the mess, buy strategies attempt to walk the path of least resistance again.”

Meantime, 10 Republican senators have proposed an alternative plan for Covid-19 stimulus costing about $600 billion. On the virus front, infections continued to show a slowing trend across some regions of the world, including in the US, though concerns remain about new variants.

These are some key events coming up:

• Earnings season is full steam ahead as companies report results, including Alibaba, GlaxoSmithKline, Ferrari, Exxon Mobil, BNP Paribas and Yum! Brands.
• The Reserve Bank of Australia’s policy decision comes Tuesday.
• Wednesday sees the EIA crude oil inventory report.
• The Bank of England sets rates on Thursday and an Indian central bank policy decision comes then too.
• The US January payrolls report is due Friday, providing a first look at hiring in 2021.

Here are the main moves in markets:

Stocks

• S&P 500 futures gained 0.5% as of 6:21 a.m. in London. The gauge fell 1.9% on Friday.
• Japan’s Topix index rose 1.2%.
• South Korea’s Kospi added 2.3%.
• Hang Seng Index rose 2.2%.
• Shanghai Composite Index added 0.4%.
• Euro Stoxx 50 futures gained 0.7%.

Currencies

• The yen traded at 104.69 per dollar.
• The offshore yuan was at 6.4592 per dollar, down 0.1%.
• The Bloomberg Dollar Spot Index fell 0.1%.
• The euro bought $1.2131.

Bonds

• The yield on 10-year Treasuries was at 1.08%.
• Australia’s 10-year yield rose two basis points to 1.15%.

Commodities

• Silver futures rose 6.9% to $28.78.
• West Texas Intermediate crude added 0.5% to $52.43 a barrel.
• Gold rose 0.7% to $1,860.41 an ounce.