A more sober mood settled on markets today amid fresh U.S.-China tensions and little progress on a federal spending deal in Washington. The dollar rose for the first day in five.
S&P 500 futures steadied after the index closed at an all-time high on Thursday, as Congress rushes to complete a pandemic-relief deal. In a sign of renewed frictions between Washington and Beijing, the U.S. Commerce Department announced it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security.”
U.S. stocks may also be more volatile than usual today with options and futures on indexes and equities set to expire.
The dollar rose, benefiting from declines in other Group of 10 currencies. In Europe, the Stoxx 600 Index fluctuated as retail and travel firms fell while healthcare companies led gains. The pound and euro dropped as both sides in Brexit talks warned that progress had hit another snag with just a few hours remaining to find a deal.
With the clock ticking to renew pandemic aid, leaders in Washington are under pressure to resolve their differences after months of deadlock amid signs of a faltering economic recovery. A bipartisan U.S. stimulus deal “appears to be close at hand,” Senate Majority Leader Mitch McConnell said, but will probably require work over the weekend to get through Congress.
The stimulus package “ought to be a sufficient bridge,” Steven Wieting, global investment strategist at Citigroup Private Bank, said on Bloomberg TV. “That along with at this stage a preparedness for this Covid emergency and the fact that vaccines are ahead by mid-year, would certainly be sufficient to get us through this period of weakness.”
Elsewhere, copper topped $8,000 a ton for the first time in more than seven years on rising demand and supply bottlenecks.
Here are the main moves in markets:
Futures on the S&P 500 Index were little changed at 8:30 a.m. New York time.The Stoxx Europe 600 Index dipped 0.1%.The MSCI Asia Pacific Index sank 0.4%.The MSCI Emerging Market Index declined 0.3%.
The Bloomberg Dollar Spot Index rose 0.1%.The euro dipped 0.1% to $1.2253.The British pound decreased 0.6% to $1.3506.The onshore yuan weakened 0.1% to 6.54 per dollar.The Japanese yen weakened 0.2% to 103.29 per dollar.
The yield on 10-year Treasuries decreased one basis point to 0.92%.The yield on two-year Treasuries declined less than one basis point to 0.12%.Germany’s 10-year yield declined less than one basis point to -0.57%.Japan’s 10-year yield decreased less than one basis point to 0.01%.Britain’s 10-year yield sank five basis points to 0.24%.
West Texas Intermediate crude gained 0.2% to $48.45 a barrel.Brent crude dipped 0.1% to $51.46 a barrel.Gold strengthened 0.1% to $1,886.61 an ounce.