(June 3): Asian stocks looked set to extend a global stock rally and climb for a third straight day as investors continue betting on an early economic recovery from the coronavirus pandemic. The dollar dropped.
Futures pointed higher in Japan, with the yen slumping overnight. Contracts in Hong Kong and Australia also advanced. U.S. equity futures opened flat after the S&P 500 earlier climbed to its highest since early March, with energy shares rising as crude oil extended its rebound. Gunmakers extended rallies as President Donald Trump vowed to dispatch troops if the recent social unrest isn’t contained. Treasuries retreated.
Global stocks are trading at a three-month high as businesses continue to reopen around the world and manufacturing gauges show economies stabilizing following coronavirus shutdowns. That’s despite a slew of risks still on the horizon, including tense U.S.-China relations that may jeopardize a hard-won trade deal.
The sometimes-violent demonstrations across U.S. cities over the killing by police of George Floyd, an unarmed black man, aren’t yet seen as a major drag on the economy and corporate profits. Despite the unrest, Chicago will enter the next phase of its reopening plan as scheduled on Wednesday.
“If I look at the markets, I see a V-shaped recovery,” Mark Mobius, co-founder at Mobius Capital Partners, said on Bloomberg TV. “That’s what the markets are telling us.”
Elsewhere, European shares climbed to a 12-week high as Chancellor Angela Merkel sought to thrash out a second aid package for Germany. Oil gained as investors eyed a potential extension of record production curbs by OPEC+.
Here are some key events coming up:
In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said.
The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.
These are the main moves in markets:
Futures on the S&P 500 Index were little changed as of 7:13 a.m. in Tokyo. The gauge rose 0.8% on Tuesday.
Futures on Japan’s Nikkei 225 advanced 1.3%.
Hang Seng futures climbed 0.8%.
Futures on Australia’s S&P/ASX 200 Index added 0.5%.
The Bloomberg Dollar Spot Index decreased 0.3%.
The yen was at 108.67 per dollar.
The offshore yuan held at 7.1076 per dollar.
The euro bought $1.1167.
The yield on 10-year Treasuries rose three basis points to 0.69%.
West Texas Intermediate crude increased 0.1% to $36.86 a barrel.
Gold was at $1,729.08 an ounce.