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(Sept 22): Asian stocks are expected to open weaker on Tuesday after US stocks closed lower on concerns about the outlook for economic stimulus and coronavirus restrictions. Bonds and the dollar rose.
Banks will be in the limelight after global lenders collapsed on a report on suspicious transactions around the world. Futures fell in Australia and Hong Kong. S&P 500 Index futures opened little changed. After approaching the threshold that many investors consider a market correction, the S&P 500 broke out of session lows. The Nasdaq 100 rose. The dollar rose the most in three months against its major peers. Japan is closed for the holidays and cash Treasuries will not trade until the London open.
The outbreak of a partisan battle to replace Supreme Court Justice Ruth Bader Ginsburg damaged the already bleak prospects for another round of fiscal stimulus, shaking investors. House Speaker Nancy Pelosi and House Democrats published an interim government funding bill without the support of the White House or Senate Republicans. Federal Reserve Chairman Jerome Powell said the economy is improving but has a long way to go before a full recovery from the pandemic.
“Valuations were getting harder and harder and people were looking the other way in the context of the undeniable support of the Fed and the view that the US government was going to top off the loss of revenue during the pandemic,” founder and executive director of Macro Risk Advisors. Said Officer Dean Curnutt on Bloomberg Television. “There is concern that this uncertainty around the elections will stay with us for a period after the elections.”
On the front of the pandemic, former Food and Drug Administration Commissioner Scott Gottlieb has warned that the United States may experience “at least one more cycle” of the virus in the fall and winter. The UK will announce new restrictions on bars and restaurants.
Meanwhile, a new investigation by the International Consortium of Investigative Journalists said that some major global banks “continued to benefit from powerful and dangerous players” over the past two decades, even after the United States imposed sanctions. Shares of HSBC Holdings Plc fell to their lowest level since 1995 in Hong Kong.
Elsewhere, oil rebounded from its biggest drop in nearly two weeks on mounting concerns about prolonged coronavirus restrictions and supply concerns.
Here are some events to watch this week:
- Fed Chairman Jerome Powell appears before the House Select Subcommittee on Coronavirus to discuss the central bank’s response on Wednesday.
- New Zealand rate decision on Wednesday.
- Initial US jobless claims are due Thursday.
These are some of the main movements in the markets:
Stocks
- S&P 500 futures were flat at 8:05 am in Sydney. The S&P 500 fell 1.2%.
- Australia’s S & P / ASX 200 Index futures fell 1%.
- Hong Kong’s Hang Seng Index futures lost 0.4% earlier.
Coins
- The yen was at 104.68 to the dollar.
- The offshore yuan was trading at 6.7976 to the dollar.
- The Bloomberg Dollar Spot Index was up 0.6%.
- The euro was trading at $ 1.1769 after sinking 0.7%.
Captivity
- The 10-year Treasury yield fell almost three basis points to 0.67%.
Raw Materials
- West Texas Intermediate crude rose 1% to $ 39.72 a barrel. It fell 3.7% earlier.
- Gold was US $ 1,914.46 an ounce after depreciating 2%.
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