Stocks Drop as Treasuries Sell Off After Powell: Markets Wrap

(Bloomberg) --Asian stocks followed U.S. peers lower after Federal Reserve Chairman Jerome Powell refrained from pushing back against the recent surge in bond yields. Treasuries extended a decline.

By Emily Barrett
Mar 5, 2021, 12:14 AM – Updated on Mar 5, 2021, 4:46 AM
Word Count: 465
A slump in technology stocks helped push the MSCI Asia-Pacific Index to a one-month low after Nasdaq 100 losses worsened to almost 10% from February’s peak. Equities fell from Japan and South Korea to China, which set a growth target of more than 6% for 2021 at the National People’s Congress.U.S. futures pointed lower after the S&P 500 erased nearly all its 2021 gains, and contracts on the tech-heavy index underperformed.

In Australia, bond yields rose, tracking a jump in the U.S. 10-year benchmark that lifted the yield curve to its steepest point since 2015. The U.S. dollar strengthened against nearly all major peers.

Oil prices leapt after the OPEC+ alliance surprised traders with its decision to keep output unchanged. Bitcoin fell with other risk assets.

The bond selloff has pulled the curve to the steepest since 2015
Powell noted the recent runup in yields without hinting at intervention, saying that he would be “concerned by disorderly conditions.” While some investors view the rates moves as a sign of economic strength, others are growing concerned about rising inflation and the impact of higher yields on elevated stock valuations.

“It makes logical and intuitive sense that Treasury yields should move back up to 1.50% or 2%, but we are concerned with the rest of the market about the speed at which it’s getting there,” said Mona Mahajan, investment strategist at Allianz Global Investors LLC.

Stock-Market Momentum Comeuppance Gets No Sympathy From the Fed

Meanwhile, the U.S. Senate voted to take up a $1.9 trillion relief bill backed by President Joe Biden, setting off a debate expected to end this weekend with approval of the nation’s sixth stimulus since the pandemic-triggered lockdowns that began a year ago.

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The February U.S. employment report on Friday will provide an update on the speed and direction of the country’s labor-market recovery.

These are some of the main moves in markets as of 11:30 a.m. in Tokyo:

S&P 500 futures dropped 0.7%. The gauge retreated 1.3% on Thursday.
Japan’s Topix index slid 1.1%.
South Korea’s Kospi index fell 1.6%.
Australia’s S&P/ASX 200 declined 0.9%.
Hong Kong’s Hang Seng shed 1.8%.
Shanghai Composite lost 0.9%.
The Bloomberg Dollar Spot Index rose 0.1%.
The euro dipped 0.1% to $1.1955.
The Japanese yen steadied around 107.95 per dollar.
The yield on 10-year Treasuries rose one basis point to 1.57%.
Australia’s 10-year yield rose seven basis points to 1.84%.
West Texas Intermediate crude jumped 0.7% to $64.25 a barrel.
Gold dropped 0.2% to $1,694.00 an ounce.
© 2021 Bloomberg L.P.


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