U.S. Stock Futures Edge Higher; Gold Steadies: Markets Wrap

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Asian stocks headed for a mixed start and U.S. equity futures pared late-session losses, as doubts lingered over the timing of a spending package from Washington. Gold steadied after tumbling the most in seven years.

Futures nudged higher in Japan and Australia, and retreated in Hong Kong. S&P 500 contracts were modestly higher after the benchmark fell for the first time in eight trading sessions as investors sold some of the rally’s biggest winners. Some traders cited comments from Senate Majority Leader Mitch McConnell saying stimulus talks are at a stalemate as a catalyst for the declines. Treasury yields jumped before this week’s debt auctions.

Investors are considering the possibility that a stalemate in Washington could significantly delay the U.S. virus rescue package, weighing on the nascent recovery. Meanwhile, the massive rally in gold that sent the haven metal to record highs above $2,000 an ounce reversed course Tuesday, as a rise in bond yields cut into the negative real rates that had supported the metal.

“There’s some profit-taking going on, they’re looking to rotate into some of the stuff that hasn’t performed as well,” said Keith Gangl, portfolio manager for Gradient Investments.

Meanwhile,Joe Biden chose Senator Kamala Harris as his running mate, betting that her ties to the African-American community and self-branding as a “progressive prosecutor” will help propel him to the White House. On the virus front, California reported a sharp jump in cases.

Elsewhere, the kiwi was steady ahead of the New Zealand central bank’s policy decision and as investors monitored evidence of new coronavirus cases in the country that forced fresh restrictions. Crude oil was little changed.

Here are some key events coming up:

  • Earnings include E.ON, Deutsche Telekom, Carlsberg, Tencent and JD.com.
  • New Zealand’s central-bank policy decision is due on Wednesday.
  • U.S. CPI for July is scheduled for Wednesday.
  • China releases a slew of data for July on Friday, including industrial production and retail sales.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 0.3% as of 7:05 a.m. in Tokyo. The index fell 0.8% on Tuesday.
  • Futures on Japan’s Nikkei 225 rose 0.2%.
  • Hang Seng Index futures slipped 0.2%.
  • Futures on Australia’s S&P/ASX 200 Index advanced 0.1%.

Currencies

  • The yen was at 106.52 per dollar.
  • The offshore yuan traded at 6.9418 per dollar.
  • The Bloomberg Dollar Spot Index added 0.1%.

Bonds

  • The yield on 10-year Treasuries rose more than six basis points to 0.64%.

Commodities

  • Gold was at $1,917.11 an ounce, up 0.3%.
  • West Texas Intermediate crude was 0.2% higher at $41.71 a barrel.

— With assistance by Claire Ballentine, and Katherine Greifeld

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