Bloomberg
Stocks Slip in Asia After Bond Selloff; Oil Steady: Markets Wrap
Andreea Papuc
Tue, February 23, 2021, 8:27 AM·3 min read
Stocks Slip in Asia After Bond Selloff; Oil Steady: Markets Wrap
(Bloomberg) -- Asian stocks inched lower Tuesday and U.S. equity futures pared gains as investors assessed expectations for faster growth and inflation that drove up commodities and bond yields.
Australian shares fluctuated, while South Korea’s dropped. Japan’s markets are closed for a holiday. S&P 500 futures were little changed after the index fell for a fifth day, its longest losing streak in a year. The Nasdaq 100 tumbled more than 2% to a three-week low as investors questioned the appeal of expensive, growth-focused stocks. Energy shares and financial companies gained.
The Bloomberg Commodity Spot Index, which tracks price movements for 23 raw materials, rose to its highest since March 2013. Brent oil climbed above $65 a barrel as Goldman Sachs Group Inc. predicted prices could advance above $70 in coming months. WTI crude held onto gains.
Treasury yields extended gains Monday and a key part of the curve -- the gap between 5- and 30-year yields -- touched the highest level in more than six years. Cash Treasuries won’t trade because of the Japan holiday.
The stock market’s searing rally from the depths of the pandemic almost a year ago is under scrutiny, as rising interest rates bolster the appeal of fixed-income investments. The prospect of a large U.S. stimulus moving quickly to approval, and encouraging news on the effectiveness of Covid-19 vaccines, are spurring trades premised on a faster economic recovery. Investors are now growing concerned that central banks may eventually start reconsidering emergency programs that have supported global markets.
The key drivers of equities “may be fading as markets come to terms with the next phase of the recovery,” said Chris Iggo, chief investment officer for core investments at AXA Investment Managers. “I wouldn’t be surprised if market returns are more volatile in the coming months. My approach to fixed income would be to look for opportunities to start to buy the long end again.”
Elsewhere, Bitcoin traded below $54,000. It plunged as much as 17% earlier Monday following a tweet from Elon Musk that the cryptocurrency’s price had risen too high too fast.
Brazilian markets tumbled following President Jair Bolsonaro’s decision to replace the head of Petroleo Brasileiro SA, the state-controlled oil company. The real fell 1% and the Ibovespa stock gauge dropped more than 4%.
These are some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:12 a.m. in Hong Kong. The S&P 500 Index declined 0.8%.Australia’s S&P/ASX 200 Index fell 0.2%.South Korea’s Kospi index fell 0.9%.Hong Kong’s Hang Seng Index futures rose 0.5% earlier.
Currencies
The yen is steady around 105.02 per dollar.The offshore yuan is at 6.4648 per dollar.The Bloomberg Dollar Spot Index was little changed.The euro is little changed at $1.2163.
Bonds
Ten-year Treasury futures were little changed. The yield on 10-year Treasuries rose three basis points to 1.37% Monday. Cash Treasuries won’t trade until the London open because of the Japan holiday.Australia’s 10-year bond yield was steady at 1.60%.
Commodities
West Texas Intermediate crude fell 0.2% to $61.59 a barrel.Gold was at $1,809.50 an ounce.The Bloomberg Commodity Spot Index rose 1.6%.
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