The Market Was Brought Down On Purpose, To Show Who Has Control Of The System
- S&P 500 climbs 1.7% Tuesday after Monday’s 4.1% slide
- Equity index futures rise in Japan, H.K.; stocks up in Sydney
7 February, 2018
Asian equity markets looked set to recover some of the losses sustained in the global rout after U.S. shares rallied and investors bought some of the most heavily sold sectors.
Australia’s benchmark opened higher after a 3.2 percent tumble on Tuesday, while futures signaled gains of at least 2 percent on Japan’s Nikkei 225 Stock Average and markets in Hong Kong pointed higher. A topsy-turvy session for the S&P 500 Index ended with technology, materials and consumer shares leading a 1.7 percent advance. The benchmark for U.S. share volatility went through wild gyrations one day after more than doubling, though ended the session down about 20 percent.
“The pullback may be considered a healthy correction,” said Candice Bangsund, fund manager at Fiera Capital Corp., which oversees more than $128 billion, in Montreal. “The favorable conditions that have underpinned the stock market rally over the last year remain largely intact at this time -- the global expansion continues and corporate earnings remain in acceleration mode.”
The sharp sell-off in stocks around the world that started last week and accelerated this week can be explained by a multitude of factors from concerns over the path of U.S. monetary policy to a rapid unwinding of trades predicated on continued low volatility in markets. Traders are now watching whether this rally can be sustained after the slump left markets from Europe to Japan in technically oversold territory.
Elsewhere, oil rose early in Asia on Wednesday after three days of declines. Metals fell Tuesday. Bitcoin traded around $7,700 after at one point sinking below $6,000 for the first time since October.
Here are some key events scheduled for this week:
India’s central bank will probably hold and maintain a neutral stance Wednesday. Governor Urjit Patel is in a bind, needing to both reduce inflation and keep rates low enough to ensure Prime Minister Narendra Modi can bridge a wider fiscal deficit. The Reserve Bank of India is probably overestimating CPI and economic growth, allowing policy makers to tilt back toward easing by midyear, Bloomberg Economics said.
Monetary policy decisions are also due this week in Russia, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines.
Earnings season continues with reports from SoftBank, Sanofi, Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter.
Dallas Fed President Robert Kaplan and New York Fed President William Dudley are among policy officials due to speak in Frankfurt and New York.
Terminal users can read more in our markets blog.
These are the main moves in markets:
Futures on Japan’s Nikkei 225 Stock Average rose 4 percent in Chicago trading. That’s about 2.8 percent higher than the level the contracts were trading when the cash equity market shut in Tokyo Tuesday.
Australia’s S&P/ASX 200 Index rose 1.2 percent.
Futures on Hong Kong’s Hang Seng Index advanced 0.5 percent.
Futures on the S&P 500 fell 0.1 percent as of 8:14 a.m. in Tokyo. The underlying measure gained 1.7 percent Tuesday.
The Bloomberg Dollar Spot Index was little changed Tuesday.
The euro traded steady at $1.2381.
The pound was little changed at $1.3956.
The yen fell 0.1 percent to 109.68 per dollar.
The yield on 10-year Treasuries climbed nine basis points to 2.80 percent.
Australia’s 10-year yield rose almost six basis points to 2.88 percent.
West Texas Intermediate crude gained 0.8 percent to $63.89 a barrel.
Gold rose 0.1 percent to $1,325.55 an ounce.
From Gerald Celente