Treasury Yields Rise on Aid Report; Stocks Steady: Markets Wrap

(Bloomberg) — Treasury yields rose Thursday after a report suggested President-elect Joe Biden plans a Covid-19 relief package of about $2 trillion. A gauge of Asia-Pacific shares edged toward another record.

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Biden’s advisers recently told allies in Congress about the cost of the package, according to the report. Biden is expected to announce his economic support plans later in the day. Yields had earlier steadied after dropping from the highest levels since March following two strong bond auctions this week. The dollar was bolstered by the stimulus news.

In Asia, Japanese equities outperformed, while China’s CSI 300 index fell the most in four months, pulling back from a 13-year high. S&P 500 contracts and European stock futures pointed higher. Technology shares led Wall Street gains Wednesday, with the Nasdaq 100 outperforming the S&P 500.

Alibaba Group Holding Ltd. and Tencent Holdings Ltd. climbed after the U.S. decided against banning American investment in the Chinese tech giants. Oil steadied and Bitcoin rose to $38,300.

© Bloomberg Treasuries see renewed selling amid report of Biden spending plans

“This will be a great year for the economy and earnings, but just a good year for the stock market,” Bob Doll, chief equity strategist at Nuveen, said on Bloomberg TV. “In other words, I think multiples are held back a bit because of modestly rising interest rates and inflation.”

Investors are betting on an economic recovery this year and tolerating stretched stock valuations, in part on expectations of further U.S. fiscal spending and better control of the pandemic with vaccines.

The latest comments from policy makers also reinforced expectations of loose monetary policy. Fed Governor Lael Brainard pushed back against suggestions the central bank could taper its bond-buying program this year, while European Central Bank council member Francois Villeroy de Galhau said the ECB will keep an easy stance for as long as needed.

Federal Reserve head Jerome Powell is due to discuss topics including the Fed’s policy framework later Thursday. Earlier, the House of Representatives voted to impeach President Donald Trump for a second time. A Senate trial for Trump likely won’t get underway before his term ends on Jan. 20.

On the virus front, China recorded its first Covid-19 death since April as new clusters continued to expand.

Here are some key events coming up:

JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are among firms due to report earnings.U.S. President-elect Joe Biden plans to lay out proposals for fiscal support on Thursday.Federal Reserve Chairman Jerome Powell takes part in a webinar on Thursday.U.S. initial jobless claims data are due Thursday.U.S. retail sales, industrial production, business inventories and consumer sentiment figures are due Friday.

These are some of the main moves in markets:

Stocks

S&P 500 futures gained 0.2% as of 7:14 a.m. in London. The gauge rose 0.2% on Wednesday.Japan’s Topix index added 0.5%. The Nikkei 225 rose 0.9%.Hang Seng index gained 0.6%.Shanghai Composite lost 0.9%.South Korea’s Kospi index was flat.Australia’s S&P/ASX 200 Index rose 0.4%.

Currencies

The Bloomberg Dollar Spot Index rose 0.1%.The euro bought $1.2140.The yen slipped 0.2% to 104.08 per dollar.The offshore yuan traded at 6.4670 per dollar.

Bonds

The yield on 10-year Treasuries rose about three basis points to 1.11%.

Commodities

West Texas Intermediate crude was at $52.90 a barrel.Gold was at $1,840.76 an ounce, down 0.3%.

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