(Bloomberg) – Asian stocks and U.S. stock futures rose Friday as traders assessed the resilience of the global recovery to the prospect of reduced Federal Reserve stimulus and risks from China.
Shares gained in Japan and Hong Kong, where technology stocks rose for the first time this week. Chinese stocks were mixed amid the debt crisis in China Evergrande Group and a short-term cash injection from the central bank to help ease nerves. Miners sapped Australian stocks after falling iron ore prices.
The S&P 500, Nasdaq 100 and European futures were in the green. U.S. stocks closed lower after swinging gains and losses ahead of Friday’s quarterly expiration of options and futures, which could trigger volatility.
Treasury yields and the dollar remained higher after surprise strength in U.S. retail sales, easing economic concerns triggered by the delta strain and highlighting the case of less expansive Fed support. Unemployment demands rose, which is likely to reflect volatility in weekly data as the labor market largely recovers.
Global equities are heading for another weekly decline, limited by the impact of the delta virus variant on economic reopening, the consequences of rising inflation and the upheavals in China. The Fed’s policy meeting next week is a possible source of volatility, as traders await more clues about the timeline for pairing bond purchases and eventually rising interest rates.
“Investors just need to be prepared for the fact that returns are much more likely to be dampened over the next five years than what we have really benefited from and enjoyed over the last five,” said Jim McDonald, head of investment strategist at Northern Trust Bank, on Bloomberg television. This view incorporates the prospect of lower valuations for Chinese companies facing more government involvement, he said.
Oil was stable, while the losing streak of iron ore threatens to push futures back below $ 100 per barrel. Ton as China pushes to rein in its steel industry. Gold advanced. An index of commodity prices has fallen, but remains in sight of a record hit in 2011, underscoring the inflation concerns that are trickling down the world economy.
Meanwhile, the European Central Bank rejected the accuracy of a Financial Times report on the euro area interest rate outlook. Bottom futures had fallen on the article, which said the ECB could reach its inflation target of 2% by 2025 based on unpublished internal models that allowed for previously higher interest rate hikes.
For more market analysis, read our MLIV blog.
Some of the key movements in markets:
S&P 500 futures rose 0.1% from 1 p.m. 06:45 in London. S&P 500 fell 0.2% Nasdaq 100 futures rose 0.1%. Nasdaq 100 rose 0.1% Japan’s Topix index added 0.3% Australia’s S & P / ASX 200 index fell 0.8% South Korea’s Kospi climbed 0.2% China’s Shanghai Composite index fell 0.4% Hong Kong’s Hang Seng index added 0.3% Euro Stoxx 50 futures rose 0.6%
Bloomberg Dollar Spot index was flat The euro was at $ 1.1769 Offshore yuan was at 6.4477 per dollar The Japanese yen was at 109.87 per dollar. Dollar, down 0.1%
Interest rates on 10-year treasuries held at 1.34% Australia’s 10-year bond yield rose four basis points to 1.31%
West Texas Intermediate crude was $ 72.37 per barrel. Barrel, down 0.3% Gold was at $ 1,761.54 an ounce, up 0.4%
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