(April 2): Asian stocks looked set for gains Friday after U.S. stocks climbed to a record on optimism about increased stimulus in the world’s largest economy. Trading should be light with holidays across the region.
Futures in Japan pointed higher after the S&P 500 Index closed above 4,000 for the first time as investors weighed President Joe Biden’s newly unveiled US$2.25 trillion spending plan ahead. Technology shares led gains, though value stocks also joined in on the rally. Treasuries rebounded after the worst quarter in decades with benchmark yields falling back below 1.7%. The dollar retreated.
In Asia, a slew of markets including Australia, Hong Kong, Singapore and India are closed for holidays, as are many across the world. Oil climbed after the OPEC+ alliance agreed to increase production gradually over the next three months.
Investors are cheering increasing signs of strength in the U.S. economy, with Friday’s U.S. employment report expected to show the quickest pace of hiring in five months. Biden’s ambitious plan to rebuild U.S. infrastructure has added to the growth outlook, even though Republican opposition to the plan raises questions about how much can actually be delivered.
Traders for now are looking past worsening virus trends, such as lockdowns in France and Canada’s Ontario province, though remain focused on inflation risk as central banks reassert their commitment to low interest rates.
“Before you worry about inflation, there’s reflation and I think that’s the main theme in the market,” said Ed Campbell, portfolio manager and managing director at QMA.
Some key events to watch this week:
U.S. employment report for March on Friday.
Good Friday starts the Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.
These are some of the main moves in financial markets:
Stocks
The S&P 500 Index increased 1.2% Thursday.
Nikkei 225 futures rose 1%.
Currencies
The yen was little changed at 110.60 per dollar.
The offshore yuan was flat at 6.5745 per dollar.
The Bloomberg Dollar Spot Index fell 0.3% Thursday.
The euro traded little changed at US$1.1776.
Bonds
The yield on 10-year Treasuries fell seven basis points to 1.67%.
Commodities
West Texas Intermediate crude rose 3.9% to US$61.45 a barrel.
Gold was flat at US$1,729 an ounce.
