Stocks and Futures Rise as Earnings Support Sentiment: Markets Shroud

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(Bloomberg) – Most Asian stocks rose on Tuesday after a record close of the S&P 500, as corporate earnings and progress on President Joe Biden’s economic program helped sentiment even as the inflation risk debate sank ‘intensified.

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Shares rose in Japan and China and fluctuated in Hong Kong. Traders digested reports of a video call between Chinese Vice Premier Liu He and US Treasury Secretary Janet Yellen on economic issues.

US futures rose as Nasdaq 100 contracts outperformed. The tech gauge drove US gains overnight amid a rally from Tesla Inc. to a market value of $ 1,000 billion. Facebook Inc. was higher at the end of the session on strong user growth and a commitment to repurchase up to $ 50 billion more in shares.

The 10-year US Treasury yield edged up and the dollar remained stable. Debate over price pressures continues, with former Treasury Secretary Lawrence Summers saying officials are unlikely to successfully deal with the “reality of inflation” until they fully acknowledge it .

A relatively strong earnings season is helping counter fears that high inflation and tighter monetary policy will slow the economic recovery from the pandemic. So far, 81% of S&P 500 members have reported earnings above expectations. Traders are also monitoring the escalation of Covid-19 cases in China and other parts of the world.

Stock markets “continue to recover and we expect this process to continue after the big tech benefits” and this week’s European Central Bank meeting, where policymakers could signal the end of their buying program bonds in the event of a pandemic, Sébastien Galy, senior macro strategist at Nordea Investment Funds, writes in a note.

In China, Modern Land China Co. has become the latest builder to miss a payment on a dollar bond, another sign of strain in the country’s indebted real estate sector.

Meanwhile, U.S. Democrats have moved closer to agreeing on Biden’s multibillion-dollar economic program. This could allow the House to pass a $ 550 billion infrastructure bill this week.

Crude oil was little changed around $ 84 a barrel, with investors assessing the outlook for U.S. stocks and the prospect of talks that could possibly help revive an Iran nuclear deal, allowing crude exports to resume.

Gold was holding above $ 1,800 an ounce and Bitcoin was trading around $ 62,800.

Here are some events to watch this week:

  • Profits: Amazon, Apple, Microsoft, Twitter, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group

  • Australia CPI, Wednesday

  • US wholesalers’ inventories, US durable goods, Wednesday

  • Bank of Japan Monetary Policy Decision Briefing Thursday

  • ECB decision on rates, briefing by President Christine Lagarde, Thursday

  • US GDP, first jobless claims, Thursday

  • Joint meeting of G-20 finance and health ministers ahead of weekend leaders’ summit on Friday

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

  • Futures on the S&P 500 climbed 0.3% at 10:46 a.m. in Tokyo. The S&P 500 rose 0.5%

  • Futures on the Nasdaq 100 rose 0.5%. The Nasdaq 100 rose 1%

  • Japan’s Topix index rose 1.3%

  • Australian S & P / ASX 200 index rose 0.2%

  • South Korea’s Kospi Index gained 0.5%

  • Hong Kong’s Hang Seng index remained stable

  • China’s Shanghai Composite Index climbed 0.2%

  • Euro Stoxx 50 futures rose 0.1%

Currencies

  • The Japanese yen was at 113.84 per dollar

  • The offshore yuan was trading at 6.3791 per dollar

  • Bloomberg Dollar Spot Index is stable

  • The euro was at $ 1.1605

Obligations

Merchandise

  • West Texas Intermediate crude was at $ 83.54 a barrel, down 0.3%

  • Gold was at $ 1,803.49 an ounce, down 0.2%

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