Stocks mixed as risks shadow China’s steadier growth

Bloomberg

Asian stocks were mixed on Monday amid data showing steadier economic growth in China as well as ongoing challenges in the nation’s troubled property sector. Treasuries were steady and the dollar slipped.
Shares fluctuated in Hong Kong and dipped in China, where traders weighed stronger-than-expected retail sales and industrial output, central bank liquidity support and a drop in home prices. Japanese equities gained, with stimulus plans softening the blow of an economic contraction. European and S&P 500 futures were little changed, while Nasdaq 100 contracts rise.
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Beijing’s crackdown on real-estate leverage is among the headwinds for the world’s second-largest economy. There are now expectations that officials may try to help ailing developers. Chinese junk dollar bonds extended a rebound.
Sovereign bond markets were comparatively calm following a period of pronounced swings due to uncertainty about whether high inflation will prove sticky and spark interest-rate hikes. Bond-market expectations for inflation over the coming decade are near the highest since 2006.
Recent fixed-income gyrations point to the worry that central banks will have to tighten policies more quickly than expected to curb sustained inflation. In contrast, global stocks near record levels signal equity investors are reassured by corporate strength and arguments that price pressures are transitory.
“We’ve seen inflation prints that we haven’t seen in decades,” Terri Jacobsen, UBS Private Wealth Management managing director, said on Bloomberg Television. She added equities can continue rallying as global supply chain issues are resolved and corporate earnings stay strong, with the Federal Reserve staying patient on policy tightening.
Fed Bank of Minneapolis President Neel Kashkari said the US central bank shouldn’t overreact to elevated inflation even as it causes pain, because it is likely to prove temporary. Treasury Secretary Janet Yellen said controlling the Covid-19 virus in the US is the key to
easing price pressures.
Elsewhere, President Joe Biden will meet virtually with Chinese President Xi Jinping. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of US technology to China.
In commodities, oil falls as traders wait to see what Biden might do to alleviate gasoline prices amid growing criticism about the impact of rising costs. Aluminum and base metals retreated, in part on China’s property slowdown.
Meanwhile, Elon Musk raised the idea of selling more of his Tesla Inc. shares in online sparring with US Senator Bernie Sanders. Elon Musk
offloaded almost $7 billion worth of Tesla stock over the past week, weighing on the shares of the electric-vehicle manufacturer.
S&P 500 futures were flat as of 7 am in London and the S&P 500 rises 0.7%.
While Nasdaq 100 futures added 0.2%, the Nasdaq 100 rises 1% and Japan’s Topix index also climbs 0.4%.
While Australia’s S&P/ASX 200 Index climbed 0.4%, South Korea’s Kospi rises 1% and Hong Kong’s Hang Seng Index also climbs by 0.1%. China’s Shanghai Composite Index lost 0.2% and Euro Stoxx 50 futures falls as much as 0.1%.
The Japanese yen was at 113.94 per dollar and the
offshore yuan traded at 6.3773 per dollar. While the Bloomberg Dollar Spot Index falls 0.1%, the euro was at $1.1458, up 0.1%.