In brief
- U.S. stocks were a mixed bag on Wednesday with the S&P 500 (+0.60%) and blue-chip Dow Jones Industrial Average (+1.46%) up on the reflation trade by while the tech stock rally came to an abrupt halt again and the tech-centric Nasdaq Composite (-0.04%) flat.
- Asian stocks open mixed as the rotation into value shares resumed in the U.S. Treasury yields were steady after a tame inflation report.
- The benchmark U.S. 10-year Treasury yield held at 1.52%.
- The dollar held on to losses.
- Oil edged up with April 2021 contracts for WTI Crude Oil (Nymex) (+0.61%) at US$64.83, on optimism over the sharpening pace of economic recovery.
- Gold rose slightly with April 2021 contracts for Gold (Comex) (+0.19%) at US$1,725.00 on a sliding dollar and as stimulus and inflation come into focus.
- Bitcoin (+0.30%) briefly topped US$57,000 before pulling back to US$55,737 as investors grew their risk appetites. Outflows from exchanges led inflows (outflows suggest that traders are looking to hold Bitcoin in anticipation of higher prices).
Market Overview
China is chomping at the bit!
Stocks in the Middle Kingdom had come under pressure earlier when Beijing central bankers warned of bubbles in both U.S. and European markets and warned that leverage was getting out of hand.
But the sharp correction in Chinese stocks saw Beijing pullback on those earlier remarks and rally a horde of Chinese brokers in the biggest stock buying program since the Chinese stock market crash in 2015.
Bullish economic data out of the U.S. and the passing of Biden’s US$1.9 trillion fiscal stimulus package has Chinese companies cheering on expectations of a sharp recovery in consumer demand from a captive (literally) U.S. consumer market.
Asian stocks rallied with China at the open, with Tokyo’s Nikkei 225 (+0.25%), Seoul’s Kospi Index (+1.84%) and Hong Kong’s Hang Seng Index (+0.16%) all higher, while Sydney’s ASX 200 (-0.34%) was flat in the morning trading session.
