Global markets start in a bearish tone as oil prices rally

(Bloomberg) – A rally in global stocks stalled within a whisker of February’s all-time high as investors mulled the pace of the recent gains and expectations for loose monetary policy. Treasuries edged lower.

Shares slipped in Tokyo, Hong Kong and Shanghai on low volumes, while Australian equities underperformed. S&P 500 futures were steady after both the benchmark and the Nasdaq Composite climbed to fresh records, helped by gains in Facebook Inc. Crude oil traded near the highest in five months as Hurricane Laura bore down on key refining facilities on the U.S. Gulf Coast. The dollar edged up.

Technical model suggests U.S. dollar could get short-term bounce
As global economies reopen, investors remain wary about fresh outbreaks of the virus and are focused on the progress of a vaccine. A summer infection spike in U.S. Sun Belt states showed more signs of easing, while cases continued to grow in Spain and Germany.

Traders are also awaiting Federal Reserve Chair Jerome Powell’s speech on Thursday about the central bank’s monetary policy framework review, which has focused on a new inflation strategy. U.S. consumer confidence dropped in August to the lowest since 2014 as Americans grapple with high unemployment and uncertainty about future federal stimulus.

“The Fed has all but guaranteed that rates are going nowhere for at least two years,” Eleanor Creagh, a market strategist at Saxo Bank, said on Bloomberg TV. “Equity remains the place for investors to escape the secular stagnation that we’re seeing within the real economy that this zero-yield world produces.”

In New Zealand, equities were disrupted for a second day after a cyber attack halted activity Tuesday.

Here are some key events coming up:

Earnings from companies including ICBC, PetroChina, HP Inc., Royal Bank of Canada and Dollar General.
The U.S. Republican National Convention runs this week.
The Bank of Korea sets monetary policy and will hold a briefing on Thursday.
Fed Chair Powell speaks at an event on Thursday.
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These are the main moves in markets:

S&P 500 futures dipped 0.1% as of 12:10 p.m. in Tokyo. The gauge gained 0.4% on Tuesday.
Hong Kong’s Hang Seng lost 0.3%.
Shanghai Composite dropped 0.9%.
Japan’s Topix index slipped 0.3%.
South Korea’s Kospi index dropped 0.6%.
Australia’s S&P/ASX 200 Index lost 1%.
Euro Stoxx 50 futures were little changed.
The Bloomberg Dollar Spot Index rose 0.1%.
The yen was at 106.49 per dollar, down 0.1%.
The offshore yuan traded little changed at 6.9017 per dollar.
The euro bought $1.1817, down 0.2%.
The yield on 10-year Treasuries rose to 0.69%.
Australia’s 10-year yield rose four basis points to 0.93%.
West Texas Intermediate crude advanced 0.1% to $43.38 a barrel.
Gold was steady at $1,928.92 an ounce

— With assistance by Vincent Cignarella, Claire Ballentine, and Vildana Hajric


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