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Stocks in Asia traded mixed on Tuesday and US futures retreated as President Donald Trump discussed plans for further China tariff increases in the absence of a trade deal. The dollar steadied and Treasuries were little changed.
Shares in Japan, China and South Korea gained, but declined in Hong Kong. Apple suppliers were mixed after Trump said the company’s iPhones could be hit by new tariffs. Earlier, the S&P 500 Index recouped from the worst week in a month as investors speculated a strong start to the holiday season will keep US economic growth on track. West Texas oil stabilized above $51 a barrel, after recouping some of Friday’s 7% plus slide.
Trade remains firmly in investors’ minds ahead of the upcoming Group-of-20 meeting between Presidents Xi Jinping and Trump, who said he’ll likely push forward with plans to increase tariffs on $200bn of Chinese goods, in an interview with the Wall Street Journal published on Monday. Trump indicated he would also slap duties on all remaining imports from the Asian nation if negotiations with his Chinese counterpart fail to produce a trade deal.
In addition, a slew of Federal Reserve speakers this week, including Chairman Jerome Powell, will be closely watched for the latest thinking on the trajectory of US interest rates as investors remain on the back foot amid a pickup in volatility. Powell’s speech on Wednesday will be parsed for any hints on the prospects for a pause in the path of increases after traders reduced expectations for the pace of US monetary policy tightening.
“Before calling it a true correction, we would like to see increased volatility across most asset classes,” Christian Crête, a portfolio manager at Hexavest, a global equities affiliate manager of Eaton Vance, said in a note. “A large part of the excesses that have been building up within financial markets over the last decade needs to be removed in order to create the market environment we are looking for to change our defensive positioning.”
Elsewhere, bitcoin steadied below $4 000.
Coming Up
Presidents Donald Trump and Xi Jinping plan to meet at the G-20 summit in Argentina that kicks off on Friday. Federal Reserve Vice Chairman Richard Clarida speaks in New York on Tuesday and Powell addresses the New York Economic Club on Wednesday. Thursday sees the release of the minutes from the Federal Open Market Committee’s November meeting.
These are the main moves in markets:
Stocks
Japan’s Topix index rose 0.6% as of 12:51 in Tokyo. Australia’s S&P/ASX 200 Index climbed 0.8%. South Korea’s Kospi index advanced 0.7%. Hong Kong’s Hang Seng Index edged lower, erasing an intraday gain of 0.1%. S&P 500 futures fell 0.2%. The S&P 500 Index gained 1.6%. The Nasdaq 100 advanced 2.3%.
Currencies
The Japanese yen rose 0.1% to 113.50/$ after dipping 0.6% on Monday. The offshore yuan traded at 6.9488/$. The Bloomberg Dollar Spot Index was steady. The euro was little changed at $1.1332. The British pound fell 0.2% to $1.2806.
Bonds
The yield on 10-year Treasuries was stable around 3.06%. Australia’s 10-year bond yield was steady at 2.63%.
Commodities
West Texas Intermediate crude fell 0.2% to $51.51 a barrel after jumping 2.4%. Gold was steady at $1 221.69 an ounce.
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