(Bloomberg) — Asian stocks climbed with American futures Monday amid positive sentiment on trade in the region and after a U.S. national lockdown was ruled out. The dollar retreated.
The Asian benchmark was on track for a record close as shares rose across the region with Japan and South Korea outperforming. Asia Pacific nations including China, Japan and South Korea on Sunday signed the world’s largest regional free-trade agreement. Australian shares advanced before trading was paused due to a market data issue.
S&P 500 futures extended last week’s advance as advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown despite the pandemic accelerating. Oil pushed higher and Treasuries were steady. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs. The tech-heavy Nasdaq 100 underperformed amid the rotation to economically sensitive industries.
Global stocks have recovered to pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, and more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world.
U.S. coronavirus cases hit a record Friday and neared 11 million infections after new cases exceeded 100,000 for 10 straight days. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, the country’s economy minister said.
“We do see a positive stream of news going forward,” Sean Fenton, chief investment officer at Sage Capital Pty in Sydney, said on Bloomberg TV. “The market looking forward towards eventual reopenings, real yields probably bottoming out, and cyclical and value stocks doing better, I think that’s a momentum that will be carried through at least over the next 3 to 6 months if not longer.”
The Asia Pacific trade agreement encompasses a third of the world’s population and gross domestic product. It includes Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations inked the Regional Comprehensive Economic Partnership, or RCEP.
Meanwhile, U.S. President Donald Trump plans several new hard-line moves against China in the remaining weeks of his term, according to Axios. They may include sanctions or trade restrictions against more Chinese companies, government entities or officials, citing human rights violations, Axios reported, citing senior administration officials they didn’t identify.
Trump showed few signs of conceding the presidential election to Joe Biden, while also hardly acting as if he was preparing for a second term.
Here are some events to watch out for this week:
China October industrial production, retail sales due Monday.Brexit talks look set to continue as the U.K. and EU approach the latest deadline.Bloomberg New Economy Forum virtually convenes global leaders to discuss trade, growing political populism, climate change, and the pandemic. Former Federal Reserve Chair Janet Yellen and Indian Prime Minister Narendra Modi are among the many speakers. Through Nov. 19.OPEC+ Joint Ministerial Monitoring Committee meets Tuesday.U.S. retail sales due Tuesday.Bank Indonesia rate decision Thursday.
These are some of the main moves in markets:
Stocks
S&P 500 Index futures rose 0.7% as of 10:34 a.m. in Tokyo. The S&P 500 gained 1.4% Friday.The MSCI Asia Pacific Index climbed 1.2%.Topix index rose 1.3%.Kospi index gained 1.6%.Hang Seng Index gained 0.8%.Shanghai Composite Index rose 0.3%.
Currencies
The yen was little changed at 104.61 per dollar.The offshore yuan rose 0.3% to 6.5794 per dollar.The Bloomberg Dollar Spot Index fell 0.2%.The euro advanced 0.1% to $1.1847.The pound climbed 0.2% to $1.3219.
Bonds
The yield on 10-year Treasuries was at 0.89%.Australia’s 10-year bond yield rose to 0.89%.
Commodities
West Texas Intermediate crude rose 1.2% to $40.60 a barrel.Gold was at $1,897 an ounce, up 0.5%.
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