Stocks, Futures Rise on Stimulus Bets; Dollar Dips: Markets Wrap

An investor looks at stock price movements on screens at a securities company in Beijing. Photographer: Nicolas Asfouri/AFP/Getty Images
An investor looks at stock price movements on screens at a securities company in Beijing. Photographer: Nicolas Asfouri/AFP/Getty Images

(Bloomberg) -- Asian stocks and U.S. equity futures rose Monday as investors focused on the prospect of additional fiscal stimulus and supportive Federal Reserve policy amid the worsening pandemic. The dollar dipped.

Stocks outperformed in South Korea and Hong Kong, and saw more modest gains in Japan and Australia. U.S. futures pointed higher, with Nasdaq 100 contracts outperforming ahead of a slew of tech earnings reports this week. The S&P 500 slipped Friday on sobering virus trends. Treasury yields edged up.

While U.S. lawmakers are sparring over President Joe Biden’s proposed $1.9 trillion Covid-19 relief plan, investors continue to expect some additional spending to materialize eventually. Traders are also hoping Fed Chair Jerome Powell will provide reassurance after Wednesday’s policy meeting that $120 billion of monthly bond purchases won’t be tapered any time soon.

Global stocks are close to all-time highs as expansive stimulus assuages concerns stemming from additional virus lockdowns and the patchy rollout of vaccines, which has led to a tougher start for the world economy in 2021 than earlier expected.

“Investors see continued open-spigot monetary policy and more fiscal stimulus,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “Coupled with the vaccine’s rollout, it will generate a critical mass of more robust economic growth as the year progresses.”

Global coronavirus cases are approaching the 100 million mark, with the U.S. stepping up surveillance of virus variants to monitor their impact on inoculations.

Elsewhere, oil and gold were steady and Bitcoin traded at around $33,000 after tumbling last week.

These are some key events coming up in the week ahead:

  • Microsoft Corp., Apple Inc., Tesla Inc., Facebook Inc., UBS Group AG and Samsung Electronics Co. are among companies reporting results.
  • Chinese President Xi Jinping is due to speak at the World Economic Forum’s “The Davos Agenda 2021” online event on Monday.
  • People’s Bank of China Governor Yi Gang and European Central Bank Chief Economist Philip Lane speak at a conference on Monday.
  • Data on U.S. home prices and consumer confidence come Tuesday.
  • The Federal Open Market Committee monetary policy decision and briefing by Chair Jerome Powell are scheduled for Wednesday.
  • Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.
  • U.S. personal income, spending and pending home sales come Friday.

These are the main moves in markets:

Stocks

  • S&P 500 futures rose 0.4% as of 12:38 p.m. in Tokyo. The S&P 500 fell 0.3% on Friday.
  • Japan’s Topix index rose 0.1%.
  • South Korea’s Kospi index added 1.7%.
  • Hang Seng Index rose 1.9%.
  • Australia’s S&P/ASX 200 Index rose 0.2%.
  • Shanghai Composite added 0.6%.

Currencies

  • The Bloomberg Dollar Spot Index shed 0.1%.
  • The yen was at 103.76 per dollar.
  • The offshore yuan climbed 0.2% to 6.4865 per dollar.
  • The euro was at $1.2176.
  • The British pound added 0.1% to $1.3702.

Bonds

  • The yield on 10-year Treasuries was at 1.09%.

Commodities

  • West Texas Intermediate crude was flat at $52.18 a barrel.
  • Gold was little changed at $1,855 an ounce.