(Bloomberg) — Asian stocks looked set for a cautious open Wednesday after a megacap technology selloff weighed on U.S. equities.
Australian shares climbed after a holiday break. Futures pointed to a muted start in Japan and Hong Kong, while U.S. contracts edged up. The S&P 500 and the Nasdaq 100 snapped four sessions of gains as Apple Inc. and Alphabet Inc. declined amid a shift toward stocks that benefit from economic reopening. Volumes remained thin into the end of the year.
A U.S. index of Chinese shares also slid. Beijing’s tightening oversight of overseas share sales and economic risks from a property slowdown are sapping sentiment. Authorities are expected to add stimulus next year to steady expansion.
Treasuries and the dollar were little changed. Crude oil held an advance to the highest in more than a month on bets that the omicron virus-strain outbreak will prove only a temporary hit to demand. Bitcoin tumbled below $48,000.
Investors are rounding out the year by locking in some profits after a 17% jump in global equities. The coronavirus, Federal Reserve policy tightening and China’s outlook are among the key risks for next year. Worries about omicron are easing on growing evidence that the fast-spreading variant appears milder in nature.
“We are pretty constructive going into 2022,” Katie Nixon, chief investment officer for Northern Trust Wealth Management, said on Bloomberg Television. “We’re having fits and starts related to this omicron variant of course. This will create maybe demand delayed but not destroyed.”
On China, Nixon said much stronger policy action is needed in 2022 to bolster growth and help reignite interest in emerging-market equities, which otherwise will remain one of the big uncertainties for investors.
Read: China’s Stable Economy Clouded by Property and Export Outlook
In the latest U.S. data, the Richmond Fed’s manufacturing survey rose in December, beating estimates. Growth in U.S. home prices cooled modestly in October after soaring during the pandemic.
“We’re sober about potential headwinds that still could be coming, even the rest of this year, but early in 2022 — the Fed is going to be raising rates, that will change things for the markets,” Ann Miletti, head of active equity at Allspring Global Investments, said on Bloomberg Television. “We are also hopeful because as you look at a lot of the economic data, it remains strong.”
What to watch this week:
- U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 8:05 a.m. in Tokyo. The S&P 500 fell 0.1%
- Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 0.5%
- Nikkei 225 futures rose 0.1%
- Hang Seng Index futures fell 0.3% earlier
- Australia’s S&P/ASX 200 Index rose 0.3%
Currencies
- The Japanese yen was little changed at 114.82 per dollar
- The offshore yuan was at 6.3734 per dollar
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was at $1.1311
Bonds
- The yield on 10-year Treasuries was little changed at 1.48%
- Australia’s 10-year bond yield fell one basis point to 1.56%
Commodities
- West Texas Intermediate crude was at $76 a barrel
- Gold was at $1,806.65 an ounce
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