Asian Stocks Mixed, U.S. Stimulus Package Continues Progress By

© Reuters.

By Gina Lee – Asia Pacific stocks were mixed Tuesday morning, with investors digested a rotation out of growth stocks that drove the into a technical correction and a fall in Treasury yields.

Japan’s was up 0.37% by 10:02 PM ET (3:02 AM GMT). Data released earlier in the day said that the GDP grew 2.8% in the fourth quarter of 2020, lower than both the 3% growth in forecasts prepared by and the third quarter’s 5.3% growth. The GDP grew 11.7% , also below the forecast 12.7% growth and the third quarter’s 22.9% growth.

South Korea’s fell 1.38% while in Australia, the was up 0.39%.

Hong Kong’s jumped 1.21%.

China’s fell 0.66% and the slumped 1.66%.

Investors did cheer progress on the U.S.’ $1.9 trillion stimulus package, with House of Representatives Speaker Nancy Pelosi saying on Monday that the chamber aims to “Wednesday morning at the latest.”

The timing of a vote in the House of Representatives “depends on when we get the paper from the Senate,” she added.

The package, proposed by President Joe Biden earlier in the year, was passed by the Senate on Saturday following a marathon overnight vote. Once the bill is passed by the House of Representatives, it will make its way to Biden to be signed into law.

Treasury Secretary Janet Yellen also said on Monday that the package would provide enough resources to fuel a “very strong” U.S. economic recovery, adding that “there are tools” to deal with inflation.

Optimism aside, some investors were still worried whether the stimulus will drive a faster global economic recovery from COVID-19 or trigger runaway inflation.

“What’s going to determine the results today is the balance between buying for the reflation trade and the selling of tech (stocks)”, he said. “It’s difficult to say what’s going to be most influential given the spectacular gains across Europe compared to the big drop in the Nasdaq,” CMC Markets chief markets strategist Michael McCarthy told Reuters.

Investors are also keeping an eye on upcoming Treasury auctions as the ten-year Treasury yield traded just below 1.6%. Asian credit markets slumped as concerns about rising rates caused more deals to be scrapped.

Rising bond yields continue to be a persistent risk, as the U.S. benchmark traded around a 12-month high and raised fears that government aid programs could lead to runaway inflation.

Other investors wondered if equity valuations have become excessive, especially as speculative tech shares favor cheaper cyclical stocks.

“There’s definitely a lot of volatility in the market right now and many of the sectors that underperformed last year are rallying, this is part of a rotation,” AllianceBernstein (NYSE:) senior equities portfolio manager Valerie Grant told Bloomberg.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.