Asian stock markets eye steady start despite US indices close at record high

Markets in Japan, China and Australia will trade for the first time this year. The Nasdaq 100 outperformed. Tesla Inc. surged as the carmaker navigated supply-chain disruptions to report blowout deliveries for the fourth quarter. Apple Inc. gained, giving it a $3 trillion market value. The U.S. gains followed European stocks which hit unprecedented highs even as trading volumes remained light because of holidays. 

Benchmark Treasury yields climbed across the curve. The 10-year note topped 1.60% in its worst start to a year since 2009 as investors braced for Federal Reserve interest-rate hikes in 2022. The dollar gained. 

Hong Kong shares will be closely watched after their worst start to a year since 2019 amid weak sentiment for local tech shares and ongoing concerns about the financial health of Chinese developers. An index of companies with most of their business in China traded in the U.S. was steady Monday.

Markets are anticipating an uptick in volatility as investors navigate headwinds from the omicron variant, supply-chain disruptions and more hawkish central banks winding back pandemic stimulus that propelled a third year of double-digit returns for equities. 

“We expect 2022 to be far more challenging from an investment perspective,” Heather Wald, Vice President at Bel Air Investment Advisors, said in an emailed note. “Rarely has a market delivered three consecutive years of double digit-returns, as we have seen from 2019-2021. With the Federal Reserve set to accelerate tightening and a fairly valued stock market, we anticipate more muted returns for the S&P next year but still expect equities to remain attractive versus other liquid asset classes.” 

Elsewhere, crude oil in New York traded near $76 a barrel following news Libya’s crude output is expected to fall to the lowest in more than a year and ahead of an OPEC+ meeting on Tuesday to discuss production. Gold fell and Bitcoin dropped below $46,000.

What to watch this week:

• FOMC meeting minutes scheduled for release Wednesday
• Fed’s Bullard discusses the U.S. economy and monetary policy in an event on Thursday
• Fed’s Daly discusses monetary policy on a panel Friday
• ECB’s Schnabel speaks on a panel Saturday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6%
• The Nasdaq 100 rose 1.1%
• Hang Seng Index futures rose 0.4% earlier

Currencies

• The Bloomberg Dollar Spot Index rose 0.5%
• The euro fell 0.7% to $1.1296
• The Japanese yen fell 0.2% to 115.35 per dollar
• The offshore yuan was at 6.3744 per dollar

Bonds

• The yield on 10-year Treasuries advanced 12 basis points to 1.63%

Commodities

• West Texas Intermediate crude rose 1.1% to $76.05 a barrel
• Gold fell 1.5% to $1,802.06 an ounce.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.