Asian Stocks Set for Muted Start; Dollar Retreats: Markets Wrap

Asian stocks looked set for a muted open after a mixed session on Wall Street, as investors assessed the prospects for a federal spending package and the likelihood for further virus-related economic restrictions. The dollar retreated.

Futures were little changed in Japan and Hong Kong, and dipped in Australia. The S&P 500 fell for a fourth session, capping its longest slide since September and is 1.5% below its Dec. 8 record. Drugmakers led the Nasdaq 100 Index higher after Alexion Pharmaceuticals Inc. agreed to be bought by AstraZeneca Plc. Energy producers tumbled afterOPEC cut its demand forecast. Oil was lower most of the day before reversing. Treasuries were little changed.

Elsewhere, Brazil’s Ibovespa Index erased losses for the year. Asia traders will be looking out for industrial production and retail sales data from China.

Investor optimism about the start of vaccine shots has given way to concern over whether a stimulus bill from a bipartisan group of lawmakers would gain traction after its release later. The virus continued to rage in the U.S., threatening harsher restrictions across the nation, and European governments are also tightening measures. New York City Mayor Bill de Blasio warned that people should be prepared for a full shutdown.

“Signs of market fatigue are more prevalent today than a month ago, even as the popular average is near all-time highs,” wrote Paul Nolte, a portfolio manager at Kingsview Investment Management. “The much-awaited correction could come as investors tire of Washington, worry about the Covid cases over the holidays, or some other concern that is likely to pass in a few months.”

Meanwhile, the Electoral College will officially elect Joe Biden president.

Here are some key events coming up:

  • Tuesday brings China industrial production and retail sales data for November.
  • The Federal Reserve meets Tuesday and Wednesday, with markets widely expecting fresh guidance on its continued asset purchases.
  • Policy decisions from the Bank of England and central banks in Mexico, Switzerland and Indonesia are due Thursday. Japan and Russia announce decisions Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 Index fell 0.4%.
  • The Nasdaq 100 Index climbed 0.7%.
  • The Stoxx Europe 600 Index added 0.4%.
  • Nikkei 225 futures were little changed.
  • Hang Seng futures rose 0.1%.
  • S&P/ASX 200 futures fell 0.3%.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.2%.
  • The euro climbed 0.3% to $1.2147.
  • The Japanese yen was unchanged at 104.01 per dollar.
  • The British pound jumped 0.8% to $1.3323.

Bonds

  • The yield on 10-year Treasuries gained less than one basis point to 0.90%.
  • Germany’s 10-year yield climbed two basis points to -0.62%.
  • Britain’s 10-year yield jumped five basis points to 0.22%.

Commodities

  • West Texas Intermediate crude rose 0.9% to $47.01 a barrel.
  • Gold futures depreciated 0.7% to $1,827 an ounce.

— With assistance by Kristine Aquino

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