Asian stocks looked primed to follow their U.S. peers higher as optimism that recent federal spending will revive growth and bolster corporate earnings pushed the S&P 500 to a record high. The dollar weakened.
Futures in Hong Kong, Japan and Australia rose after the tech-heavy Nasdaq 100 Index jumped more than 2% and the S&P 500 posted its best first-day reaction to a presidential inauguration since at least 1937. Netflix Inc. surged after a jump in subscribers, chipmaker ASML Holding NV rallied on solid results and Morgan Stanley gained after reporting record full-year results. Treasuries were little changed.
Elsewhere, oil pared a rally late in the trading session as concerns over lackluster consumption clouded optimism. Gold and copper climbed. The loonie rose to a two-year high after the Bank of Canada predicted a strong second half rebound.
Investors looked past a fresh stumble in the rollout of vaccines and elevated infection rates, toward the promise of more stimulus and an expanded federal effort to get shots to more Americans quickly under President Joe Biden. Stimulus plans in Japan and Europe will come under further scrutiny Thursday after central bank decisions in those jurisdictions.
“If stimulus happens at the same time that people get vaccinated, the optimism can’t help but build,” said Keith Buchanan, a portfolio manager for GLOBALT Investments in Atlanta. “It’s a fairly safe bet there will be another stimulus package with more direct payments to consumers and individuals and more help for small businesses.”
Investors are counting on more spending to help propel economic growth under Biden, who is planning a flurry of executive orders on his first day. Still, it won’t be all smooth sailing, with Janet Yellen encountering early Republican resistance to Biden’s relief plan in her confirmation hearing to become Treasury secretary.
On the virus front, Germany suffered record daily deaths and a study on the South African variant raised concern about the efficacy of vaccines.
These are some key events coming up:
- Policy decisions are due Thursday from the Bank of Japan, Bank Indonesia and the European Central Bank.
- Earnings are due from companies including Kia Motors Corp., Schlumberger Ltd. and Yes Bank Ltd.
These are the main moves in markets:
- The S&P 500 rose 1.4%.
- Futures on Japan’s Nikkei 225 climbed 0.5%.
- Hang Seng futures earlier gained 0.2%.
- Futures on Australia’s S&P/ASX 200 Index rose 0.7%.
- The Bloomberg Dollar Spot Index slipped 0.2%.
- The yen rose 0.4% to 103.52 per dollar.
- The offshore yuan gained 0.3% to 6.4618 per dollar.
- The euro bought $1.2107, down 0.2%.
- The yield on 10-year Treasuries held at 1.08%.
- West Texas Intermediate crude advanced 0.5% to $53.24 a barrel.
- Gold was at $1,871.10 an ounce, up 1.7%.
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