(Aug 4): Asian stocks are set for a cautious open Wednesday as China’s clampdown on its technology giants and the spread of the delta Covid-19 strain subdue sentiment. Crude oil retreated.
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Futures edged up in Japan, Australia and Hong Kong. U.S. equity contracts fluctuated in early Asian trading after generally favorable corporate earnings took the S&P 500 to another record close overnight.
But Chinese stocks listed in the U.S. slid amid fears online gaming may be the next industry in the firing line of Beijing’s sweeping regulatory crackdown on technology giants. Alibaba Group Holding Ltd.’s revenue missed estimates for the first time in over two years, a sign the clampdown is taking a toll.
The benchmark 10-year U.S. Treasury yield held its recent retreat and oil dropped toward US$70 a barrel. The spread of the delta strain globally is exacerbating concerns that the economic rebound from the pandemic is losing steam. A gauge of the dollar inched lower.
Investors remain cautious as they weigh robust second-quarter earnings against rising Covid-19 cases and worries about inflation. Key U.S. jobs data this week could stoke market swings if they lead investors to adjust expectations about the Federal Reserve’s likely timeline for tapering stimulus.
“I think what you’re going to continue to see is this continued volatility. For a while, the primary volatility focus was is there inflation or isn’t there?” JJ Kinahan, chief market strategist at TD Ameritrade, said in an interview. “This week it’s the good earnings versus the variant, and will it pause the reopening of businesses?”
The spread of the delta coronavirus variant has pushed the threshold for herd immunity to well over 80% and potentially approaching 90%, according to an Infectious Diseases Society of America briefing.
Here are some key events to watch this week:
Bank of England is expected to keep its benchmark interest rate and its bond-buying target unchanged Thursday
Reserve Bank of India monetary policy decision, briefing Friday
The U.S. jobs report is expected to show another robust month of hiring Friday
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Stocks
S&P 500 futures slipped 0.1% as of 7:02 a.m. in Tokyo. The S&P 500 rose 0.8%
Nasdaq 100 futures were steady. The Nasdaq 100 rose 0.7%
Nikkei 225 futures climbed 0.3%
Australia’s S&P/ASX 200 Index futures added 0.1%
Hang Seng Index future rose 0.2% earlier
Currencies
The yen traded at 109.06 per dollar
The offshore yuan was at 6.4664 per dollar
The Bloomberg Dollar Spot Index dipped 0.1%
The euro was little changed at US$1.1864
Bonds
The yield on 10-year Treasuries was little changed at 1.17%
Commodities
West Texas Intermediate crude fell 0.2% to US$70.41 a barrel
Gold was at US$1,810.40 an ounce-BLOOMBERG