Stock rally eases with Asia mixed; Yuan holds gain: Markets Wrap

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Published: January 10, 2019 6:29:58 AM

The rally in global equities showed signs of stalling on Thursday, with Asian stocks opening mixed. U.S. stocks earlier climbed as investors cheered the dovish tone in minutes of the most recent Federal Reserve meeting. Oil held gains.

Stock rally eases with Asia mixed; Yuan holds gain: Markets Wrap

The rally in global equities showed signs of stalling on Thursday, with Asian stocks opening mixed. U.S. stocks earlier climbed as investors cheered the dovish tone in minutes of the most recent Federal Reserve meeting. Oil held gains.

Equities slipped in Japan, while they were little changed in South Korea and Australia. The S&P 500 Index posted a fourth day of gains as the Fed minutes revealed policy makers took a more cautious approach to further interest-rate increases, chiming with Chairman Jerome Powell’s tone from last week. Still, gains were limited amid concern the partial government shutdown will continue for some time. The offshore yuan stayed at the strongest since August as the U.S. and China laid the ground for resolving trade issues after three days of negotiations.

The dollar and Treasuries were steady. Crude dipped after climbing above $52 a barrel and entering a bull market.

Global stocks have been rallying amid optimism tensions are thawing between the U.S. and China on trade, though the most recent meetings have ended with few details. The Fed minutes indicated policy makers took a more cautious approach to further rate increases than their initial statement following the December meeting.

“I’m happy to see that there was caution in the minutes because it means that the market didn’t mug the Fed,” Alicia Levine, chief strategist at BNY Mellon Investment Management, said on Bloomberg TV. “You want it to be that this is what the FOMC really believes, that caution is warranted, that they’re going to be data-dependent, and there are alternative outcomes that they should be aware of. I take great comfort in these minutes.”

Meanwhile, the U.S. government shutdown is dragging on. President Donald Trump said his party was “very unified” behind his plan to keep the government closed until he gets funding to build a wall along the Mexican border, which is at the center of the dispute. He then walked out of a meeting with Democratic congressional leaders Nancy Pelosi and Charles Schumer, calling it a “total waste of time.”

Elsewhere, emerging-market stocks extended a rally that’s taken MSCI’s gauge to the highest in more than a month. Most industrial metals advanced overnight after China signaled measures to spur consumption.

Here are some events investors may focus on this week:

Fed Chairman Powell will speak to the Economic Club of Washington D.C. on Thursday. Britain’s Parliament resumes a debate on the Brexit withdrawal bill, with Prime Minister Theresa May seeking to avoid defeat in a vote set for the week of Jan. 14.
These are the main moves in markets:

Stocks
Japan’s Topix index fell 0.9 percent as of 9:19 a.m. in Tokyo. Australia’s S&P/ASX 200 Index and South Korea’s Kospi were little changed. Hong Kong’s Hang Seng Index futures gained 0.2 percent. S&P 500 futures ticked 0.2 percent lower. The S&P 500 rose 0.4 percent.

Currencies
The yen was steady at 108.23 per dollar. The offshore yuan gained less than 0.1 percent to 6.8097 per dollar. The euro gained 0.1 percent to $1.1552. The pound climbed 0.1 percent to $1.2796.

Bonds
The yield on 10-year Treasuries held at 2.71 percent. Australia’s 10-year bond yield fell two basis points to 2.31 percent.

Commodities
West Texas Intermediate crude slipped 0.4 percent to $52.16 a barrel, after surging 5.2 percent to the highest in a month. Gold traded at $1,292.11 an ounce.

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