Treasury Yields Drop; Asia Set for Muted Start: Markets Wrap

(Bloomberg) -- Treasury yields declined for a second day and U.S. stocks saw modest gains amid optimism the American economy will continue to benefit from government support. Asian shares looked poised for a muted start.

Treasuries saw strong demand for a second consecutive day at a government debt sale, helping to send yields down from the highest levels since March. Stock futures were little changed in Japan, Hong Kong and Australia. Technology shares led gains in the U.S., with the Nasdaq 100 outperforming the S&P 500. The dollar edged higher.

Elsewhere, oil fell as the stronger dollar and rising refined products supply offset shrinking U.S. crude inventories. Bitcoin gained and gold retreated.

“This will be a great year for the economy and earnings, but just a good year for the stock market,” Bob Doll, chief equity strategist at Nuveen, said on Bloomberg TV. “In other words, I think multiples are held back a bit because of modestly rising interest rates and inflation.”

In Washington, the House of Representatives voted to impeach President Donald Trump for a second time. A Senate trial for Trump won’t likely get under way before his term ends on Jan. 20.

In Europe, European Central Bank council member Francois Villeroy de Galhau said the ECB will keep an easy stance for as long as needed.

On the coronavirus front, the U.K. reported the most deaths in one day since the pandemic began. Johnson & Johnson’s single-dose Covid-19 vaccine may not be authorized for use until March, weeks later than U.S. officials have suggested.

Here are some key events coming up:

• JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are among firms due to report earnings.
• U.S. President-elect Joe Biden plans to lay out proposals for fiscal support on Thursday.
• Federal Reserve Chairman Jerome Powell takes part in a webinar on Thursday.
• U.S. initial jobless claims data are due Thursday.
• U.S. retail sales, industrial production, business inventories and consumer sentiment figures are due Friday.

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.2% on Wednesday.
• Futures on Japan’s Nikkei 225 were little changed.
• Hang Seng futures added 0.2%.
• Futures on Australia’s S&P/ASX 200 Index rose 0.1%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.2%.
• The euro bought $1.2155.
• The yen was at 103.88 per dollar.
• The offshore yuan fell 0.4% to 6.4695 per dollar.

Bonds

• The yield on 10-year Treasuries declined four basis points to 1.09%.

Commodities

• West Texas Intermediate crude retreated 0.6% to $52.89 a barrel.
• Gold fell 0.4% to $1,848.01 an ounce.