(Bloomberg) — Most Asian stocks fell as traders weighed President-elect Donald Trump’s policy agenda and the impact of a strong dollar on the region’s economy.
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The benchmark MSCI Asia-Pacific Index fell for a third day as U.S. bond yields rose, threatening to send money back to U.S. assets. Bloomberg’s U.S. dollar benchmark rose for the fourth consecutive session and is inching back towards a one-year high. Hong Kong stocks led regional losses as investors remained concerned about the lack of new economic stimulus from China.
While the so-called Trump trade will help boost the dollar and U.S. stocks, the impact of the former president’s policies on assets in other parts of the world is expected to be less positive. His plans for higher tariffs are expected to weigh on economies around the world, particularly in countries such as China, a major exporter to the United States.
“President Trump’s tariffs, deficits and upward pressure on the dollar raise questions, forcing the Fed to slow its pace of easing,” said Philip Uhl, head of portfolio management at Rayliant Global Advisors. Ta. “All these fears are becoming more evident among investors today and appear to be weighing on Asian stocks.”
The yield on the 10-year US Treasury note rose 3 basis points to 4.34%. The Bloomberg Dollar Spot Index rose for a third day after rising 0.5% on Monday. Oil prices fell by the most in two weeks, but were little changed.
“Improving economic data, a perhaps too dovish Fed, and further policy elaboration from the Trump administration could push U.S. Treasury yields higher,” LPL Financial strategists said in a note to clients on Monday. “It would take a negative economic surprise for yields to fall significantly from current levels.”
Asia’s emerging currencies fell against the dollar, with the Thai baht and Indonesian rupiah leading the decline.
China’s benchmark CSI300 index oscillated between gains and losses as reports that authorities were planning to cut taxes on home purchases to help revive the moribund housing market gained at least some support. The developer’s shares, as measured by Bloomberg Intelligence, rose as much as 0.3% on the news, but have since fallen back.
Sat Dufra, fund manager at Janus Henderson Investors in Singapore, said: “It’s not enough to get investors excited about the housing recovery. The demand isn’t there and it doesn’t really stimulate demand. ” he said. “Recent inflation shows that it will be more difficult to reverse this deflationary slide, and incremental measures will not change low confidence in China.”
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Tencent Holdings Ltd. and Alibaba Group Holding Ltd.’s results this week reveal how efforts to streamline operations and cut costs have helped them survive while Chinese government stimulus measures boost consumer spending. I would.
The S&P 500 closed 0.1% higher on Monday, hovering around the 6,000 mark, setting a new record for the 51st time this year. The Dow Jones Industrial Average rose 0.7%.
The next major item on the agenda is likely to be US inflation data released on Wednesday. The core consumer price index, which excludes food and energy, likely rose at the same pace on a monthly and annual basis compared to the September reading.
Mr. Trump’s election victory could push U.S. stocks higher toward the end of the year than they did when he was elected eight years ago, according to JPMorgan Chase & Co.
“We expect 2024 returns to be greater than 2016,” Andrew Tyler, the bank’s head of U.S. market intelligence, said in a note to clients. A big advantage for the S&P 500 is the weakness outside the US, with China, the UK, the EU, Canada, and Mexico all experiencing slower growth than they did then.
This week’s main events:
German CPI, ZEW Survey, Tuesday
Tuesday’s Fed speakers include Christopher Waller, Patrick Harker and Neil Kashkari
The Fed conducted a survey of bank lending executives on Tuesday.
Eurozone industrial production, Wednesday
US CPI, Wednesday
Wednesday’s Fed speakers include Jeffrey Schmidt, Laurie Logan, Neel Kashkari, and Alberto Musallem
Eurozone GDP, Thursday
US PPI, unemployment claims, Thursday
Walt Disney earnings Thursday
Fed speakers include Jerome Powell, John Williams and Adrianna Kugler on Thursday.
China retail sales, industrial production, Friday
US Retail Sales, Empire Manufacturing, Industrial Production, Friday
The main movements in the market are:
stock
S&P 500 futures were down 0.1% as of 2:10 p.m. Tokyo time.
Nikkei 225 futures (OSE) fell 0.9%
Japan’s TOPIX fell 0.1%
Australia’s S&P/ASX 200 falls 0.1%
Hong Kong’s Hang Seng fell 2.3%.
The Shanghai Composite fell 0.3%.
Euro Stoxx50 futures fall 0.5%
currency
Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.1% to $1.0643.
The Japanese yen rose 0.1% to 153.50 yen to the dollar.
The offshore yuan fell 0.3% to 7.2478 yuan to the dollar.
cryptocurrency
Bitcoin rose 0.5% to $88,444.39.
Ether rose 0.2% to $3,332.49
bond
The 10-year Treasury yield rose 2 basis points to 4.32%.
Japan’s 10-year bond yield remains almost unchanged at 1.000%
The Australian 10-year bond yield fell 1 basis point to 4.56%.
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott.
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