U.S. futures and stocks in Australia were higher, with a few markets closed for holidays, following a late-session advance on Wall Street. Crude oil gained for a fifth consecutive day.
S&P 500 futures edged up after the benchmark staged a turnaround late in the session to end firmer after California sounded a note of optimism in its fight against the virus. Australia opened modestly higher. Equities will likely remain under pressure amid simmering U.S.-China tensions and uncertainty over the impact of some American states beginning to re-open. Markets are closed in Japan, China and South Korea.
Hong Kong assets will be in focus after the economy contracted 8.9% in the first quarter from a year earlier, its worst quarter ever. West Texas oil extended gains. Treasuries won’t trade until London opens.
Despite the gains in the U.S., global stocks had begun the week lower for a third straight session, a streak not seen in almost two months, as U.S.-China discord flared again and President Donald Trump prodded the nation to reopen for business. Investors are weighing fears of a second wave of infections and a steady stream of bad economic data against efforts by many countries to start easing lockdown restrictions.
“At this point of time we think this is more of a risk to monitor rather than something that breaks the fundamental economic story,” Chetan Ahya, chief economist at Morgan Stanley, said on Bloomberg TV in reference to the U.S.-China discord. “We are more focused on what the policy reactions which every government and central bank is taking up and I think that’s a more important driver right now for the economy.”
In other coronavirus news, California, the first state to shut down its economy over Covid-19, will start loosening its lockdown on Friday by allowing stores to sell items such as books, clothes and flowers through curbside pickup. Italy began to reopen its economy after two months, but the premier’s plan was criticized for being too cautious. Spain started to relax its lockdown regime after weeks of confinement. Hong Kong may soon reopen cinemas and gyms.
Earnings roll on this week, with firms including Walt Disney Co., BMW, and Air France-KLM scheduled to report.
Here are some key events coming up:
- Regional Federal Reserve chiefs are due to speak, including Charles Evans and James Bullard.
- The Reserve Bank of Australia has a policy decision on Tuesday and the Bank of England on Thursday.
- Friday brings the U.S. jobs report for April, expected to show severe impact from the pandemic. The median forecast in a Bloomberg survey of economists calls for a 21 million plunge in payrolls.
These are some of the major moves in financial markets:
Stocks
- S&P 500 futures edged up 0.3% as of 8:07 a.m. in Hong Kong. The S&P 500 Index gained 0.4%.
- Australia’s S&P/ASX 200 Index rose 0.6%.
- Hong Kong’s Hang Seng Index futures earlier were up 0.2%.
Currencies
- The Japanese yen was at 106.68 per dollar, little changed.
- The euro was at $1.0906.
- The British pound traded at $1.2453.
Bonds
- The yield on 10-year Treasuries gained two basis points to 0.63%.
- Australia’s 10-year bond yield held at 0.84%.
Commodities
- West Texas Intermediate crude rose 5.3% to $21.47 a barrel.
- Gold was little changed at $1,703.31 an ounce.
– Bloomberg