Markets Overview
- ASX SPI 200 futures up 0.5% to 7,966.00
- Dow Average up 0.6% to 40,896.53
- Aussie up 1.0% to 0.6733 per US$
- US 10-year yield fell 1.1bps to 3.8711%
- Australia 3-year bond yield fell 1 bp to 3.56%
- Australia 10-year bond yield fell 1.3 bps to 3.92%
- Gold spot down 0.2% to $2,504.08
- Brent futures down 2.4% to $77.79/bbl
Economic Events
- 11:30: (AU) RBA Minutes of Aug. Policy Meeting
Asian stocks are set to gain Tuesday, led by Japan’s benchmark, following a buoyant session on Wall Street where the S&P 500 advanced for an eighth straight day — the longest winning streak this year.
Tokyo equity futures climbed more than 1.5%, with smaller increases in Hong Kong and Sydney. Gains will be fueled by a bullish mood in the US, where a rally that’s already topped $3 trillion from this month’s lows rolled on amid bets the Federal Reserve will signal it’s ready to start cutting interest rates.
While tech led gains on Monday, an equal-weighted version of the US equity benchmark — one that gives Target Corp. as much clout as Microsoft Corp. — hit an all-time high amid hopes the rally will broaden beyond the megacap space. The Russell 2000 of smaller firms added 1.2%.
A bumpy stretch for investors in the dog days of July and August hasn’t tempered their zest for equities, with allocations still robust despite a bout of recent volatility and heightened uncertainty around the economy.
“Investors ‘climbed a wall of worry’ as the stock-market relief rally gained momentum,” said Craig Johnson at Piper Sandler. “Equities will likely consolidate ahead of Fed commentary at Jackson Hole this week.”
Stock volume has been trending lower since the trading surge during the early-August selloff as traders are reluctant to place big bets ahead of the Fed’s Jackson Hole economic symposium this week. About 10 billion shares changed hands on exchanges Monday, 14% below the one-month average. S&P 500 futures were little changed early Tuesday.
Treasury 10-year yields fell one basis point to 3.87% on Monday. The dollar hit the lowest since March. Oil sank about 3%. Secretary of State Antony Blinken said Israeli Prime Minister Benjamin Netanyahu has accepted a cease-fire proposal for Gaza and “the next important step is for Hamas to say yes.”
proposal for Gaza and “the next important step is for Hamas to say yes.”
In Asia, focus will be on whether the yen will keep surging against the greenback after outperforming most of its peers in the Group of 10 Monday. The rally came before Bank of Japan Governor Kazuo Ueda appears in parliament on Friday where he’s expected to give hints on the central bank’s rate-hike path.
