Asian stocks looked set to follow their U.S. peers higher Friday as moves to limit retail trader speculation led to gains in stocks that hedge funds had been forced to abandon. The dollar retreated.
Futures were more than 1% higher in Japan, Hong Kong and Australia. The S&P 500 rebounded from its worse loss since October. Trading platforms restricted activity in stocks whipsawed by internet chatrooms, from GameStop Corp. to AMC Entertainment Holdings Inc. Hedge funds that had shorted the shares were burned in recent days, forcing them to reduce holdings to lower risk levels. Treasuries retreated, pushing the yield on 10-year notes up to 1.05%.
All 11 industry groups in the S&P 500 traded higher, with sentiment also boosted by solid corporate earnings from the likes of Mastercard Inc. and Comcast Corp. and a surprise drop in jobless claims. Still, oil declined the most in nearly a week with the spread of new Covid-19 variants and tighter lockdown measures weighing on nascent hopes of a demand recovery.
Global stocks have seen a volatile week after a prolonged rally spurred talk of asset bubbles and predictions of a pullback given the still-raging pandemic and patchy rollout of vaccines. The turmoil created by internet chat rooms has stoked fears of broader consequences for Wall Street, particularly hedge funds, but that fear appeared to subside on Thursday.
“Earnings are great and guidance is better and we’re picking up the pace of getting vaccines out and eventually we’ll have fiscal stimulus coming out of Washington,” said Arthur Hogan, chief market strategist at National Securities Corp. “The market is trying to digest a lot of things at the same time.”
These are the main moves in markets:
- The S&P 500 Index jumped 1% on Thursday.
- Futures on Japan’s Nikkei 225 climbed 1.1%.
- Hang Seng futures earlier added 1.5%.
- Futures on Australia’s S&P/ASX 200 Index rose 1%.
- The Bloomberg Dollar Spot Index slipped 0.1%.
- The euro rose 0.1% to $1.2123.
- The British pound rose 0.3% to $1.3730.
- The yen weakened 0.1% to 104.24 per dollar.
- The yield on 10-year Treasuries rose three basis points to 1.05%.
- West Texas Intermediate crude fell 1.1% to $52.26 a barrel.
- Gold was at $1,842.98 an ounce.
— With assistance by Lu Wang, and Brendan Walsh