SYDNEY (Reuters) – Asian stocks rose on Monday and U.S. futures recovered their initial losses, with newly formed retail investors turning their attention to precious metals, promising a break for some hard-hit hedge funds.
The broader MSCI index for Asia Pacific stocks outside Japan rose 1.4% after four consecutive sessions of losses.
Japan’s Nikkei rose 1.2% after dropping nearly 2% on Friday, while Chinese blue chips gained 0.5% as the country’s central bank injected more money into the financial markets.
Futures for the S&P 500 were up 0.3%, having dropped by 1% in the first shares, while NASDAQ futures were down 0.1%. EUROSTOXX 50 futures added 0.6% and FTSE futures 0.2%.
Resellers noted a shift in the battle between retail investors and Wall Street that prompted hedge funds to trade most shares in a decade last week, amid strong swings at GameStop Corp.
The conversation now was that silver was the new target for the retail audience, as the metal jumped 6% to a six-month high, possibly limiting the need for troubled stock fund sales.
Analysts have warned that this amusing episode was indeed a secondary spectacle compared to signs of a loss of economic momentum in the United States and Europe, as coronavirus blockages attack.
In fact, two surveys from China showed that manufacturing activity slowed in January, as restrictions took their toll in some regions.
News of vaccine launches has also not been positive, mainly due to doubts about whether they will work on new strains of COVID.
“It is these considerations, not what is happening with a video game retailer on a daily basis, that weighs on risky assets,” said John Briggs, global head of strategy at NatWest Markets. “Most of the market assessments, the risk in particular, are premised on the fact that we can see a light at the end of the COVID tunnel.”
Doubts also arose about the future of President Joe Biden’s $ 1.9 trillion aid package, with 10 Republican senators calling for a $ 600 billion plan.
The nervousness in the shares caused only a brief ripple in the bonds, with Treasury yields actually rising at the end of last week, perhaps a reflection of the wave of ongoing loans.
A record $ 1.11 trillion in gross Treasury issues is scheduled for this quarter, compared to $ 685 billion in the same period last year.
On Monday, US 10-year earnings rose to 1.08% and closer to the recent 10-month top of 1.177%.
Higher yields, combined with more cautious market humor, have seen the safe-haven dollar steady above its recent lows. The dollar index stood at 90.535, after jumping from a low of 89.206 in early January.
The euro fell by $ 1.2129, well below its recent peak of $ 1.2349, while the dollar held steady at 104.70 yen.
Gold followed up to $ 1,862 an ounce, but repeatedly stagnated in resistance at around $ 1,875. [GOL/]
Oil also followed gains for other commodities, with U.S. oil rising 21 cents to $ 52.42 a barrel. Brent oil futures gained 33 cents to $ 55.37. [O/R]
Wayne Cole reporting; Editing by Shri Navaratnam, Richard Pullin and Gerry Doyle