Across the bloc, the COVID vaccination rollout programme has started to gather pace after a slower start at the beginning of the year.
(Bloomberg) -- European stocks rose and U.S. equity futures swung between red and green as momentum in corporate earnings and the global economic recovery bouyed investor sentiment. Treasury yields slipped.The Stoxx Europe 600 Index opened higher after a seventh straight week of gains. Nasdaq 100 futures got a boost from easing Treasury yields, while S&P 500 contracts were steady after the U.S. gauge chalked a fourth week of advances to a fresh all-time high. Blue-chip companies reporting later on Monday include The Coca-Cola Company, IBM and United Airlines Holdings Inc. Chinese stocks outperformed amid easing concerns about the health of state enterprise China Huarong Asset Management Co., a distressed-debt manager. China’s financial regulator on Friday said Huarong had ample liquidity, the first official comments since the company missed a deadline to report earnings. Ebbing fears of contagion drove a rally in Huarong bonds.Robust economic data from China and the U.S. last week helped push the MSCI All-Country World Index to another record despite concerns surrounding the spread of Covid-19 variants. New infections in the past week surpassed 5.2 million, the most since the pandemic began.The risk of another destabilizing increase in borrowing costs has also subsided, as bond yields have pulled back from recent highs. This week traders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace.“Our current view is that with short-term interest rates set to remain low for the medium term and our expectation that earnings will continue to increase, it is unlikely that the increase in long-term interest rates will trigger an equity market fall,” Russel Chesler, head of investments and capital markets at VanEck Australia, said in a note.Elsewhere, Bitcoin pared losses after tumbling the most since February over the weekend.Here are some key events to watch this week:Apple’s first product unveiling of the year on Tuesday.Reserve Bank of Australia releases minutes of its policy meeting on Tuesday.EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases manufacturing and services purchasing managers indexes Friday.These are some of the main moves in financial markets:StocksFutures on the S&P 500 Index declined 0.1% as of 8:26 a.m. London time.The Stoxx Europe 600 Index rose 0.1%.The MSCI Asia Pacific Index increased 0.1%.The MSCI Emerging Market Index was little changed.CurrenciesThe Bloomberg Dollar Spot Index dipped 0.1%.The euro was little changed at $1.1982.The British pound rose 0.1% to $1.3849.The onshore yuan strengthened 0.1% to 6.516 per dollar.The Japanese yen strengthened 0.3% to 108.48 per dollar.BondsThe yield on 10-year Treasuries fell two basis points to 1.56%.The yield on two-year Treasuries decreased less than one basis point to 0.16%.Germany’s 10-year yield dipped less than one basis point to -0.27%.Britain’s 10-year yield fell one basis point to 0.756%.Japan’s 10-year yield declined one basis point to 0.088%.CommoditiesWest Texas Intermediate crude dipped 0.3% to $62.96 a barrel.Brent crude decreased 0.3% to $66.54 a barrel.Gold strengthened 0.2% to $1,780.37 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
MSCI's broadest index of Asia-Pacific shares outside Japan went as high as 699.70, a level not seen since March 18. "The extremely supportive monetary and fiscal policy setting continues to provide a fertile environment for risk assets," said Rodrigo Catril, senior forex strategist at National Australia Bank. Australian shares finished unchanged from Friday's close while New Zealand's benchmark index gained 0.6% and South Korea's KOSPI added 0.1%.
(Bloomberg) -- After a historic antitrust crackdown on China’s biggest tech companies last week, investors are betting there is more pain ahead.GAM Investments, BNP Paribas Asset Management and JP Morgan Asset Management Inc. see more regulatory tightening in China’s clampdown on monopolistic practices, putting pressure on the country’s leading internet stocks over the next few months. The Hang Seng Tech Index, where many Chinese tech giants are listed, has already lost about a quarter of its value from a rout that began mid-February.The shockwaves from Beijing’s bid to quell abuses of information and market dominance among industry leaders have left global investors pondering the prospects of China’s internet firms. The antitrust crackdown has exacerbated a global tech selloff sparked by rising bond yields, as traders forecast tighter liquidity conditions at home and abroad and lower company valuations.“Regulations for China internet companies, especially the big ones, will continue to tighten in 2021,” said Marcella Chow, global market strategist at JP Morgan Asset. “This uncertainty may act as a cap for some companies temporarily.”China slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. after a four-month long investigation into the e-commerce giant’s market practices, then ordered an overhaul of Ant Group Co. Over the past week, more than 30 tech giants issued pledges to obey antitrust laws after Beijing gave them a month to conduct reviews and comply with government guidelines.READ: Jack Ma’s Double-Whammy Marks the End of China Tech’s Golden AgeAlibaba shares have slumped 23% in Hong Kong from a peak in October. Food delivery platform Meituan and tech giant Tencent Holdings Ltd., which have been on analyst radars for regulatory probes, are down 36% and 18%, respectively, from their peaks earlier this year. By contrast, the Nasdaq 100 index is up more than 8% this year despite entering a technical correction in March.Looking ahead, China’s tech companies are likely to move far more cautiously on acquisitions, over-compensate on getting signoffs from Beijing, and levy lower fees on the domestic internet traffic they dominate. This coincides with some facing delisting threats and sales curbs in the U.S., and others reverberating from a selloff sparked by Archegos Capital Management.Valuations too are serving as a deterrent for investors. Even after its decline, the Hang Seng Tech Index is trading at about 38 times its 12-month earnings estimates versus the 29 times multiple of its American counterpart.“We have already applied a valuations discount to the whole Chinese internet sector to factor in higher regulation risks,” said Jian Shi Cortesi, a Zurich-based fund manager at GAM. The $132 billion asset manager has reduced its exposure to the sector in the past few months amid high valuations, she added.The Hang Seng Tech Index was down as much as 1.1% on Monday. Tencent shares fell as much as 1.9% after Citigroup Inc. and Morgan Stanley lowered their target prices on expectations that advertising revenues will take a hit as apparel-brand and online-education providers cut spending.Keep the FaithThat said, Beijing has moved far faster with its antitrust reforms than the U.S. and Europe have in similar efforts. The landmark case against Microsoft Corp.’s alleged software monopoly took more than half a decade of back-and-forth before settling in 2004. Current hearings involving U.S. tech titans from Google to Facebook Inc. span several fronts, multiple cases and plaintiffs, and may not see the inside of a courtroom for years to come.In contrast, Beijing regulators torpedoed Ant’s IPO the month after Ma’s infamous speech, published new rules shortly after intended to curb monopolistic practices across its internet landscape, then launched its probe into Alibaba on Christmas Eve.“Clarity reduces uncertainty, so this is a positive,” said Joshua Crabb, a portfolio manager at Robeco in Hong Kong.That has helped give investors more optimism for the long term. Money managers see the potential for tech companies to boost earnings as digital technologies catch on for everything from e-commerce and entertainment to social media, a trend that has been accelerated by the pandemic.Meanwhile, mainland traders have kept the faith. They still hold about 6.5% stake in Tencent, the highest in at least three years, according to calculations by Bloomberg based on exchange data.“Post this round of regulation scrutiny, we believe the Chinese internet industry will resume healthy growth,” GAM’s Cortesi said.(Updates with performance of Hang Seng Tech Index, Tencent in tenth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Australian shares closed near 14-month highs as upbeat economic data from the US and China supported hopes of a global economic recovery.
US stocks rallied to more record highs while Asian markets open mixed but gain later in the day
London’s FTSE 100 crossed 7,000 points on Friday to reach its highest level since February last year as investors piled into the “value” sectors that feature heavily in the UK blue-chip index. The FTSE closed up 0.5 per cent at 7,019, breaching the 7,000 threshold for the first time since the coronavirus crisis swept through Europe, led higher by financials, basic materials and industrial stocks. Similar bets were visible on Wall Street, where the S&P 500 was up 0.4 per cent to a new record at the market close in New York, with basic materials the top-performing sector of the blue-chip index.
Fresh data showed a big rebound in job listings in the UK, fuelling hopes of a reopening boom.
Asian shares slipped on Thursday dragged down by Chinese stocks as recent upbeat economic data raised fears of monetary policy tightening, while the dollar index struggled near one-month lows. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1% after two straight days of gains. Japan's Nikkei pared early gains to finish 0.07% higher while New Zealand's benchmark index fell 0.9%.
Global equities reached new heights and Treasuries rallied sharply on Thursday, following the release of upbeat economic data in the US and reassurances that the Federal Reserve will continue to support financial markets. US government debt rallied sharply alongside the upswing in stocks, with the yield on the 10-year US Treasury sliding 0.1 percentage points at one point to 1.53 per cent. It later edged back to 1.55 per cent, marking the steepest daily drop since February. The jolt in Treasuries followed comments from Jay Powell, Fed chair, on Wednesday that the central bank would maintain its asset purchase programme until “substantial progress” had been made towards full employment in the US.