Asian stocks, U.S. stock futures and Treasury yields all declined on Friday as investors examined President-elect Joe Biden’s $ 1.9 trillion Covid-19 aid plan.
With few surprises to catch investors off guard, attention has turned to how much of the package will be approved by Congress and a reminder that he is looking to raise some taxes. Biden’s proposal includes a wave of new spending, more direct payments to families, an expansion of unemployment insurance benefits and an expansion of vaccination and virus testing programs.
S&P 500 futures fell after weakness in technology and consumer stocks brought the benchmark down at the end of Thursday’s session. Shares fell in Japan, Hong Kong and South Korea, although they rose slightly in Australia. Xiaomi Corp. fell after the Trump administration blacklisted the Chinese smartphone maker for its military ties, along with China National Offshore Oil Corp.
Elsewhere, Federal Reserve Chairman Jerome Powell said that policymakers will not increase interest rates, unless they see worrying signs of inflation. Oil rose to a new 10-month high in New York in hopes of stimulus. Bitcoin traded at around $ 39,000, while continuing to recover from this week’s rapid decline.
Biden’s “American Rescue Plan ”occurs as coronavirus deaths reach record levels and local governments expand roadblocks to contain the spread of the pandemic during the winter months. The proposal also calls for a federal minimum wage of $ 15 and more protection against eviction.
“It looks like this has already been evaluated at least to the extent that it is,” said Ilya Spivak, chief Asia-Pacific strategist at DailyFX, referring to Biden’s stimulus plan. “The main question is how much of this is committed to be approved. This is probably the next layer of speculative uncertainty that markets are focused on. Hence the answer changes. “
Investors are debating how high yields can rise before the recovery of risky assets falters. Traders who are betting on an economic recovery this year are tolerating high stock valuations, in part because they expect more US fiscal spending and better control of the vaccine pandemic.
Powell said the time to raise rates “is not early” and said lawmakers would “warn the world” long before any decision to reduce bond purchases. His comments further increased the interest curve, while tie rates went up.
On the virus front, China recorded its first Covid-19 death since April, as new clusters continued to expand. France said it would extend stricter curfew measures across the country in an attempt to stem the spread of the coronavirus.
Here are some important events:
Deutsche Bank US bank analyst Matthew O’Connor predicts the earnings season, which starts with JPMorgan.
These are some of the main movements in the markets:
Stocks
- S&P 500 futures fell 0.1% from 11:53 am in Tokyo. The indicator lost 0.4% on Thursday.
- Japan’s Topix fell 0.5%.
- Hang Seng rose 0.4%.
- Shanghai Composite was up 0.5%.
- South Korea’s Kospi sank 1%.
- Australia’s S & P / ASX 200 index rose 0.3%.
Coins
- The Bloomberg Dollar Spot Index added 0.1%.
- The yen was at 103.76 per dollar.
- The offshore yuan remained at 6.4651 per dollar.
- The euro bought $ 1.2156.
Titles
- Yield on 10-year Treasury bills fell to 1.11%.
- Australia’s 10-year income has dropped to 1.09%.
Commodities
- West Texas Intermediate crude changed little at $ 53.57 a barrel.
- Gold was at $ 1,852.23 an ounce, up 0.3%.
– With the help of Dave Liedtka, Kamaron Leach and Claire Ballentine