Stocks, Futures Up as Traders Mull Taper Outlook: Markets Wrap

(Bloomberg) — Most Asian stocks rose Monday amid an ongoing rally in Japan sparked by the planned exit of the prime minister and as traders mulled slower U.S. hiring that may delay a reduction in Federal Reserve stimulus.

MSCI Inc.’s Asia-Pacific gauge climbed for a seventh session, the longest streak since January. Japan closed up more than 1% to a 31-year high on hopes of better pandemic management and more spending by Prime Minister Yoshihide Suga’s successor. U.S. and European equity futures advanced.

The S&P 500 was little changed Friday, the Nasdaq 100 edged up to a record and Treasury yields rose as investors digested disappointing U.S. payroll growth and faster-than-projected wage increases. U.S. markets are closed Monday for the Labor Day holiday and there is no Treasuries cash trading.

Aluminum hit the highest in over a decade as political unrest in Guinea fueled concerns over supply of the raw material needed to make the metal. Australia’s dollar slid as rising virus cases stoke questions about whether the central bank will delay a plan to taper bond purchases. The U.S. dollar rose.

The U.S. economy added 235,000 jobs in August — the smallest gain in seven months — as the delta virus variant spread. The soft report seems likely to prompt Fed policy makers to delay considering a move to scale back asset purchases at their September meeting. It also points to a challenging period of slower economic reopening and elevated price pressures.

The jobs slowdown “reinforces that some form of stimulus will remain in the system for the foreseeable future,” George Boubouras, K2 Asset Management head of research, said on Bloomberg Television.

The bumpy progress of President Joe Biden’s $3.5 trillion tax and spending package is in focus too. A senior White House adviser expressed confidence that a key Democratic senator who raised objections to the plan can eventually be persuaded to give his backing.

Elsewhere, oil extended losses after Saudi Arabia slashed crude prices for Asian buyers. Bitcoin was near $52,000. El Salvador implements a law on Tuesday that makes Bitcoin legal tender.

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What to watch this week:

U.S. President Joe Biden will likely make his choice this week on whether to renominate Fed Chair Jerome Powell to a second termReserve Bank of Australia rate decision TuesdayChina trade data will provide clues on its economic recovery, TuesdayEl Salvador’s Bitcoin law takes effect, making the virtual currency legal tender, TuesdayDallas Fed President Robert Kaplan holds a virtual town hall discussion WednesdayECB President Christine Lagarde holds a press conference after the bank’s rate decision ThursdayChina PPI, CPI, new yuan loans, money supply, aggregate financing, Thursday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.1% as of 7:13 a.m. in London. The S&P 500 was little changed FridayNasdaq 100 futures were up 0.2%. The Nasdaq 100 rose 0.3%Japan’s Topix index rose 1.3%Australia’s S&P/ASX 200 Index increased 0.1%South Korea’s Kospi index fell was flatHong Kong’s Hang Seng Index rose 0.8%China’s Shanghai Composite Index added 1.1%Euro Stoxx 50 futures rose 0.3%

Currencies

The Bloomberg Dollar Spot Index rose 0.1%The euro was little changed at $1.1869The yen was at 109.82 per dollarThe offshore yuan was at 6.4459 per dollar

Bonds

The yield on 10-year Treasuries rose four basis points to 1.32% FridayAustralia’s 10-year bond yield rose about four basis points to 1.26%

Commodities

West Texas Intermediate crude slid 1.4% to $68.31 a barrelGold was at $1,827.70 an ounce

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