(Bloomberg) — Asian stocks gained after a rally in several large technology companies drove US stocks to another record high.
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Benchmarks in Japan, South Korea and Australia all advanced, while Hong Kong and mainland Chinese equities edged lower. The S&P 500 has now set 30 all-time highs this year, defying concern about narrow breadth that may make the market more vulnerable to surprises.
Chinese shares dropped after Monday’s data dump showed the nation’s housing slump deepened in May, triggering new calls for the government to pump cash and credit into the economy. Declines in real estate investment and home prices both gathered pace last month.
Australia’s central bank will keep its benchmark cash rate at a 12-year high of 4.35% for a fifth straight meeting Tuesday, according to a Bloomberg survey of economists. The nation’s 10-year bond yield climbed one basis point to 4.12%.
Ahead of Wednesday’s holiday in the US, traders geared up for retail-sales data and a slew of Federal Reserve speakers. Treasuries were little changed in Asia after falling Monday amid a flurry of high-grade corporate bond sales that exceeded $21 billion. The dollar weakened against most of its Group-of-10 peers.
“We do expect the dollar to remain pretty resilient on a short-term basis, largely because of the fact that, all the other central banks or the major central banks, like for example, the ECB will probably be cutting rates first,” Kelvin Tay, regional chief investment officer of UBS Global Wealth Management, said in an interview on Bloomberg Television
The US benchmark index topped 5,470 Monday, with Tesla Inc. and Apple Inc. leading gains in megacaps. The Nasdaq 100 came closer to the 20,000 mark as Micron Technology Inc. climbed to a record after some firms raised their targets.
“We believe the S&P 500 can reach 6,000 by year-end as the combination of better earnings and one or two rate cuts is like a turbo booster for stock prices,” said James Demmert at Main Street Research. “The Fed may not need to cut rates this year but if they do, it will be even more bullish for equities, particularly tech.”
Optimism over a resilient economy, improving corporate earnings and the potential start of rate cuts have pushed US equities up about 15% this year. Fed Bank of Philadelphia President Patrick Harker said he sees one rate cut as appropriate for this year based on his current forecast.Story continuesInvestors will keep a close watch on the implications of Beijing’s latest move in its trade tensions with Brussels, after China launched an anti-dumping probe on pork imports from the European Union. That comes as the bloc looks at Chinese subsidies across a range of industries and will impose tariffs on electric car imports from July.
In commodities, oil held the biggest advance in a week as risk-on sentiment in wider markets overshadowed a mixed outlook for crude. Gold was little changed.
Key events this week:
Australia rate decision, Tuesday
Eurozone CPI, Tuesday
US retail sales, business inventories, industrial production, Tuesday
Fed’s Thomas Barkin, Lorie Logan, Adriana Kugler, Alberto Musalem, Austan Goolsbee speak, Tuesday
UK CPI, Wednesday
US Juneteenth holiday, Wednesday
China loan prime rates, Thursday
Eurozone consumer confidence, Thursday
UK BOE rate decision, Thursday
US housing starts, initial jobless claims, Thursday
Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Friday
US existing home sales, Conf. Board leading index, Friday
Fed’s Thomas Barkin speaks, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 10:35 a.m. Tokyo time
Nikkei 225 futures (OSE) rose 1%
Japan’s Topix rose 0.4%
Australia’s S&P/ASX 200 rose 0.9%
Hong Kong’s Hang Seng fell 0.3%
The Shanghai Composite was little changed
Euro Stoxx 50 futures rose 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0730
The Japanese yen was little changed at 157.64 per dollar
The offshore yuan was little changed at 7.2709 per dollar
Cryptocurrencies
Bitcoin fell 1.6% to $65,286.51
Ether fell 2.3% to $3,434.10
Bonds
The yield on 10-year Treasuries declined two basis points to 4.27%
Australia’s 10-year yield advanced one basis point to 4.12%
Commodities
West Texas Intermediate crude was little changed
Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
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