Asia Stocks Set to Track U.S. Gains on Better Data: Markets Wrap

Asian stocks looked set to track gains in U.S. counterparts Tuesday after better-than-estimated economic data overshadowed concern over an increase in coronavirus cases. The dollar and Treasuries advanced.

Futures in Japan and Australia pointed higher. Hong Kong assets will be closely watched after the U.S. said it revoked the city’s special status over China’s new security measures. S&P 500 futures had a muted open after the benchmark erased its June decline as a report showed U.S. pending home sales posted a record gain, exceeding all forecasts. The tech-heavy Nasdaq extended gains as Facebook Inc. wiped out its losses. Oil held gains.

Investors are weighing an improvement in U.S. economic data that partly resulted from some states beginning to ease restrictions from lockdowns, against a continued increase in cases. Federal Reserve Chairman Jerome Powell stressed the importance of keeping the coronavirus contagion contained as the economy bounces back.

As deaths from the virus surpassed 500,000 worldwide and confirmed cases exceeded 10 million, the World Health Organization warned the worst is yet to come.

38,845 in U.S.Most new cases today

-10% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​101 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-2.​3% Global GDP Tracker (annualized), May


“It’s not clear what trajectory coronavirus is heading,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told Bloomberg TV. “But I also think because we’re into quarter-end, there’s been some re-balancing. So I’m kind of in the camp that any weakness is short-lived. I would think July is going to be a strong month for stocks.”

Meanwhile, U.S. Commerce Secretary Wilbur Ross said regulations affording preferential treatment to Hong Kong over China, including the availability of export license exceptions, were suspended, in a statement. Ross pointed to China’s imposition of new security measures on Hong Kong and risks surrounding U.S. technology, as reasons behind the move.

Here are some key events coming up:

  • Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin testify before the House Financial Services Committee on Tuesday.
  • The monthly U.S. jobs report will be released on Thursday.

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 7:01 a.m. in Tokyo. The S&P 500 Index rose 1.5%.
  • Nikkei 225 futures rose 1.1%.
  • Australia’s S&P/ASX 200 Index futures climbed 1.2%.
  • Hong Kong’s Hang Seng Index futures rose 0.6% earlier.

Currencies

  • The yen was flat at 107.58 per dollar after depreciating 0.3%.
  • The offshore yuan traded at 7.0770 per dollar.
  • The euro was at $1.1241.
  • Bloomberg Dollar Spot Index gained 0.1%.

Bonds

  • The yield on 10-year Treasuries dipped two basis points to 0.62%.

Commodities

  • West Texas Intermediate crude slipped 0.5% to $39.52 a barrel after a 3% gain.
  • Gold was flat at $1,772.81 an ounce.

— With assistance by Rita Nazareth, and Vildana Hajric

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