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Asian Stock Futures Mixed; U.S. Shares Climb: Markets Wrap

Asian stocks looked set for a mixed session as investors weighed continued gains in U.S. shares with an increase in Sino-American tensions over Hong Kong. Treasury yields dipped.
Bloomberg
By Bloomberg
28 May
Daily Life in Beijing As China’s Economy Suffers Historic Slump Due to Virus Shutdown A motorcyclist rides past the People's Bank of China building in Beijing. Photographer: Qilai Shen/Bloomberg

Asian stocks looked set for a mixed session as investors weighed continued gains in U.S. shares with an increase in Sino-American tensions over Hong Kong. Treasury yields dipped.Futures pointed higher in Japan and Australia, and retreated in Hong Kong. U.S. contracts were little changed in Asia trading. The Trump administration said it could no longer certify Hong Kong’s political autonomy from China, a move that could have far-reaching consequences on its special trading status with the U.S. Still, the S&P 500 climbed to an 12-week high, holding above technical levels considered key by chart watchers. The Nasdaq turned positive late in the session after Micron Technologies forecast earnings that were ahead of estimates, lifting chipmakers. The dollar ticked higher.

S&P 500's market cap to money supply leaves further upside for valuation

Investors are closely watching the new U.S.-China friction -- including possible sanctions over Beijing’s crackdown in Hong Kong -- as global stocks push higher on hopes economies are beginning to recover after a deep downturn. Federal Reserve Bank of St. Louis President James Bullard said the American economy may already have bottomed.

“Eventually we will see a recovery but to be honest I think analysts are still way too optimistic about corporate profits,” David Kelly, chief global strategist at JPMorgan Asset Management, said on Bloomberg TV. “We are in for a much deeper profit slide than investors are expecting and that does make the stock market somewhat vulnerable.”

China’s daily currency fixing will be closely watched as the offshore yuan tests the weakest level on record amid speculation the government would be willing to permit a weaker currency in response to fresh punitive measures from the U.S.

Elsewhere. the Stoxx Europe 600 Index ended higher and Italy’s government bonds rose after details emerged of Europe’s 750 billion euros ($823 billion) fiscal stimulus package. The euro gained. Oil slumped toward $32 a barrel in New York.

Here are some key events coming up:

  • Thursday brings the U.S. jobless claims reading for the week ended May 23.
  • Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday.
  • Euro-area data due Friday is forecast to show consumer inflation fell to 0.1% on May from 0.4% the previous month.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index were flat as of 7:26 a.m. in Tokyo. The gauge rose 1.5% on Wednesday.
  • Futures on Japan’s Nikkei 225 climbed 0.9%.
  • Hang Seng futures slipped 0.7%.
  • Futures on Australia’s S&P/ASX 200 Index rose 0.9%.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.1%.
  • The yen was at 107.74 per dollar.
  • The offshore yuan was at 7.1812 per dollar.
  • The euro bought $1.1008.

Bonds

  • The yield on 10-year Treasuries fell two basis points to 0.68%.

Commodities

  • West Texas Intermediate crude dipped 1.5% to $32.28 a barrel.
  • Gold was at $1,709.18 an ounce.

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