US Equity Futures Rise, China Tech Bolsters Asia: Markets Wrap
- Asia-Pacific share gauge up for third day amid Hong Kong jump
- Traders are evaluating growth, inflation and China Covid risks
Asian stocks rose Tuesday amid a jump in some technology firms and as investors assessed China’s efforts to stamp out Covid.
An Asian share index rose for a third day -- it’s longest winning streak since mid-March. US and European futures bounced back after a Wall Street drop.
China’s tech companies jumped on optimism Beijing may ease up on a yearlong clampdown following a meeting between regulators and corporate giants.
Meanwhile, Shanghai reported three days of zero community transmission, a milestone that could lead officials to start unwinding a punishing lockdown. Flareups elsewhere in China showed how hard it is to tackle the omicron strain.
A challenging global economic outlook amid elevated food and fuel costs and tightening monetary settings continues to shape sentiment. Oil has jumped to about $114 a barrel and an index of agricultural prices is at a record high.
Treasury yields climbed and the dollar held a retreat. Cryptocurrencies weathered the latest stablecoin turbulence, leaving Bitcoin near $30,000.
US data Monday showed New York state manufacturing activity unexpectedly shrank in May for the second time in three months. That followed Chinese figures revealing a collapse in economic activity due to Covid-linked curbs.
The economic reports have fanned concerns of a downturn in the global economy alongside persistent price pressures that are forcing the Federal Reserve and a slew of other central banks to tighten monetary policy.
“With inflation showing little sign of letting up, the Fed is under pressure to accelerate the pace of tightening,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said in a note. Taken together with the impact of Russia’s war in Ukraine and China’s Covid struggles, this backdrop “suggests global growth may be decelerating more quickly than forecast.”
New York Fed President John Williams downplayed deteriorating liquidity conditions in financial markets, saying it was to be expected given rising volatility as investors grapple with uncertainty over global events and shifting U.S. monetary policy.
What damage will be done to the US economy and global markets before the Fed changes tack and eases policy again? The “Fed Put” is the theme of this week’s MLIV Pulse survey. Click here to participate anonymously.
- Fed Chair Jerome Powell among slate of Fed speakers Tuesday
- Reserve Bank of Australia releases minutes of its May policy meeting Tuesday
- G-7 finance ministers and central bankers meeting Wednesday
- Eurozone, UK CPI Wednesday
- Philadelphia Fed President Patrick Harker speaks Wednesday
- China loan prime rates Friday