(Bloomberg) — Asian stocks looked set for a cautious start Thursday after U.S. shares edged up to another all-time high amid light volumes in the final days of the year. Treasury yields climbed, breaching some key technical levels.
Australian shares fluctuated, while futures for Japan dipped and Hong Kong’s were flat. U.S. contracts ticked lower. The S&P 500 reached the 70th record close of the year, while the Nasdaq 100 was little changed.
The 10-year Treasury yield’s advance took it above its 50-day moving average for the first time in about a month. The dollar was steady against major peers in early Asian trading. Crude oil held gains.
China’s battered property developers and regulatory crackdown are again in focus heading toward 2022. Some holders of two China Evergrande Group dollar bonds with coupons due Tuesday said they had yet to receive payment.
Alibaba Group Holding Ltd. is in talks over a possible sale of its stake in Weibo Corp., a Twitter-like social media service, to a state-owned Chinese conglomerate. Beijing is moving to curb the influence of China’s tech giants in the media sphere. Alibaba and an index of Chinese shares slid in U.S. trading.
As the year draws to a close, investors are contemplating the implications of the fast-spreading omicron coronavirus variant, decreasing stimulus and elevated inflation stoked by supply-chain bottlenecks. Key questions include whether Treasury yields will push higher and how much impetus is left in the equity bull market.
“Despite global surges in Covid cases, the markets are reflecting the new reality that Covid is here to stay albeit more on our terms than its,” Kevin Philip, managing director at Bel Air Investment Advisors, said in an email. Next year, “we are facing less of a Covid-influenced world, and a return toward normalcy,” he added.
The coronavirus is unlikely to go away completely and will probably settle into a pattern of transmission at low levels, the World Health Organization said, warning of a “bumpy road” until then.
Chinese officials renewed their commitment to a zero tolerance approach to Covid-19 as they tackle a protracted outbreak in the western city of Xi’an. Micron Technology Inc. said output of some computer memory will be hit by the lockdown there.
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 were little changed as of 8:13 a.m. in Tokyo. The S&P 500 rose 0.1%
- Nasdaq 100 futures slipped 0.1%. The Nasdaq 100 was little changed
- Nikkei 225 futures fell 0.2%
- Australia’s S&P/ASX 200 Index was little changed
- Hang Seng Index futures were flat
Currencies
- The Japanese yen was at 114.97 per dollar
- The offshore yuan was at 6.3709 per dollar
- The Bloomberg Dollar Spot Index fell 0.2% Wednesday
- The euro was at $1.1351
Bonds
- The yield on 10-year Treasuries advanced seven basis points to 1.55% Wednesday
- Australia’s 10-year yield increased eight basis points to 1.61%
Commodities
- West Texas Intermediate crude was at $76.49 a barrel, down 0.1%
- Gold was at $1,804.30 an ounce
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