(Bloomberg) – Stocks fell with US and European stock futures on Thursday after an increase in bond yields rekindled concerns about the valuations. Falling Chinese stocks led to equity losses in Asia.
The Asia-Pacific meter from MSCI Inc. had its worst drop this week. The technology sector struggled as real estate, financial and energy stocks outperformed amid a shift to value segments. The S&P 500 and Nasdaq 100 futures plummeted, but recorded earlier lows after a nightly decline in both indices.
The benchmark Treasury yields fell in Asian trading after approaching 1.5% on Wednesday. An indicator of market inflation expectations over the next five years has reached its highest level since 2008. Traders also assessed data that point to a still uneven economic recovery from the depths of the pandemic.
The rise in inflation expectations and long-term borrowing costs is fueling concerns that a prolonged recovery in the stock markets may be at risk. Investors are trying to gauge central banks’ appetite for buying longer-term bonds to keep financial conditions slack. The focus is on the upcoming comments from Federal Reserve Chairman Jerome Powell after Chicago Fed Chairman Charles Evans said the recent rise in yields reflected economic optimism.
“Inflation is a concern; there’s a lot of money flowing through the system and it makes sense to have some sort of correction now, ”said Shana Sissel, investment director at Spotlight Asset Group. “And increasing bond yields is the implicit way of tightening the market, as the Fed has made it clear that they have no intention of doing so.”
Read: Inflation expectations in the US hit a high in the decade with a resurgence in earnings
Democratic leaders in the Senate are working to consolidate support for the $ 1.9 trillion stimulus bill, which is expected to boost growth. The US economy expanded modestly in the first two months of the year and vaccinations are helping to optimize business, according to the Federal Reserve’s Beige Book.
Elsewhere, oil was traded close to $ 62 a barrel, with traders focusing on a critical OPEC + meeting that could reduce supply, while following events in the Middle East after Houthi rebels said they hit a spot of Saudi Aramco with a missile.
Some important events to watch this week:
OPEC + meeting in production on Thursday. US factory orders, jobless claims and durable goods orders are due on Thursday. Federal Reserve Chairman Jerome Powell speaks Thursday. recovery.
These are some of the changes in the markets:
Stocks
S&P 500 futures fell 0.2% as of 7:16 am in London. The S&P 500 fell 1.3%. The Nasdaq 100 lost 2.9%. Japan’s Topix index fell 1%. Australia’s S & P / ASX 200 index fell 0.8%. South Korea’s Kospi index fell 1.3%. Hong Kong’s Hang Seng index lost 1.9%. Shanghai Composite fell 2.1%. The CSI 300 index lost 3.2%. Euro Stoxx 50 futures fell 0.7%.
Coins
The yen was trading at 107.16 per dollar, down 0.1%. The offshore yuan was at 6.4742 per dollar. The Bloomberg Dollar Spot Index has changed little. The euro traded at $ 1.2057.
Titles
Yield on 10-year Treasury bonds fell by about two basis points to 1.46%. Yield on Australia’s 10-year bonds rose 10 basis points to 1.77%.
Commodities
West Texas Intermediate crude added 0.8% to $ 61.76 a barrel. Gold was 0.5% higher, at around $ 1,720 an ounce.
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