Asia Stocks to Open Mixed After U.S. Gains Fade: Markets Wrap

Stocks in Asia were poised for a muted start after gains for U.S. stocks faded into the close, with concerns mounting that a spike in virus cases in some states could impact the speed of the economic rebound. Gold rose to the highest since 2012.

Futures dipped in Japan, while those in Hong Kong were flat and Australian contracts edged higher. The S&P 500 jumped as much as 1.2% before paring the gain by two-thirds on reports that a surge in cases in several hotspots in the South and Southwest of the U.S. threatened to derail plans to ramp up reopenings. The Nasdaq Composite hit another all-time high. The dollar fell and Treasuries were little changed.

Investors are betting that trillions of dollars in stimulus by central banks and governments around the globe will shield economies from a resurgence in virus breakouts. PMIs for June showed business activity in the world’s largest economy continuing a rebound that started in May.

Stimulus “puts the bottom on bad news,” said Nela Richardson, an investment strategist at Edward Jones. “Bad news isn’t so bad if we think that that means more stimulus. The markets are responding also to the quick action, quickest in any recession going back to the Great Depression, of the Federal government and monetary authorities, not just in the United States, but around the world.”

On the virus front, Anthony Fauci, the U.S.’s top infectious-disease doctor, warned Tuesday that the coronavirus isn’t taking a summer break, judging from its persistent spread in the U.S. Sun Belt. A German state locked down a municipality where 1,553 workers tested positive at a single meat factory.

Here are some key events coming up:

  • The IMF will release new 2020 growth projections on Wednesday.
  • U.S. jobless claims, durable goods and GDP data are due Thursday.
  • A rebalance of Russell indexes is due on Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 rose 0.4%.
  • Futures on Japan’s Nikkei 225 fell 0.3%.
  • Hang Seng futures were little changed.
  • Futures on Australia’s S&P/ASX 200 Index gained 0.1%.

Currencies

  • The yen was at 106.49 per dollar.
  • The offshore yuan held at 7.0609 per dollar.
  • The Bloomberg Dollar Spot Index fell 0.3%.
  • The euro bought $1.1311.

Bonds

  • The yield on 10-year Treasuries remained at 0.71%.

Commodities

  • West Texas Intermediate crude fell 1.7% to $40.02 a barrel.
  • Gold rose 0.8% to $1,768.41 an ounce.

— With assistance by Sarah Ponczek

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