Stocks, U.S. Futures Fall Amid China, Delta Risks: Markets Wrap

(Bloomberg) — U.S. equity futures and most Asian stocks slipped Monday as key Chinese data pointed to slower growth, underscoring the risks to economic reopening from the fast-spreading delta virus strain.

Shares fell in Japan on escalating Covid-19 infections and a stronger yen, while equities retreated in Hong Kong and fluctuated in China. S&P 500 and Nasdaq 100 contracts retreated after a drop in U.S. consumer sentiment to a near-decade low injected some caution, depressing Treasury yields and the dollar.

China’s retail sales and industrial output numbers showed economic activity slowed more than expected in July, with fresh virus outbreaks adding new risks to a recovery already hit by floods and faltering global demand. Speculation is growing that officials could further ease monetary policy. Beijing’s regulatory crackdown on private industries is also unnerving markets.

Investors are tracking alarm in Congress as the Taliban take control of Afghanistan in the vacuum left by departing U.S. and NATO forces. President Joe Biden’s economic agenda is already facing lawmaker obstacles, after some House Democrats threatened to withhold support from a $3.5 trillion budget blueprint until a bipartisan infrastructure package is signed into law.

Equities in the U.S. and Europe pushed on to all-time highs last week, bolstered by vaccine rollouts. But the delta variant and inflationary pressures remain threats. There are fears the world may struggle to achieve herd immunity, where the pathogen stops spreading rapidly because enough people are shielded against it. Inoculations are lagging in Asia, pressuring its markets.

“Shares remain vulnerable to a short-term correction with possible triggers being the upswing in global coronavirus cases, the inflation scare and U.S. taper talk,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital.

Traders will be monitoring the Federal Open Market Committee’s latest minutes this week and a speech by Federal Reserve Chair Jerome Powell for more clues about the likely timeline for a tapering in the central bank’s $120 billion in monthly bond purchases.

Elsewhere, Bitcoin was trading around $47,500 and the total market value of cryptocurrencies was back above $2 trillion. Crude oil slipped.

In other political developments, Canadian Prime Minister Justin Trudeau called an election for Sept. 20, and Malaysia’s Prime Minister Muhyiddin Yassin told his party he plans to resign on Monday.

Here are some events to watch this week:

U.S. Federal Reserve Chair Jerome Powell hosts a town hall discussion with educators TuesdayChina’s top legislative body, the National People’s Congress Standing Committee, begins a four-day meeting in Beijing TuesdayU.S. retail sales are due TuesdayReserve Bank of Australia minutes are scheduled to be released TuesdayReserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr WednesdayFOMC minutes released WednesdayBank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday

For more market analysis read our MLIV blog.

These are the main moves in markets:


S&P 500 futures fell 0.3% as of 11:15 a.m. in Tokyo. The S&P 500 rose 0.2% FridayNasdaq 100 futures slid 0.2%. The Nasdaq 100 rose 0.3%Japan’s Topix index dropped 1.7%Australia’s S&P/ASX 200 Index shed 0.4%Hong Kong’s Hang Seng Index lost 0.5%China’s Shanghai Composite Index added 0.2%


The Japanese yen traded at 109.36 per dollar, up 0.2%The offshore yuan was at 6.4788 per dollarThe Bloomberg Dollar Spot Index was flatThe euro was at $1.1799


The yield on 10-year Treasuries declined two basis point to 1.26%Australia’s 10-year bond yield fell six basis points to 1.15%


West Texas Intermediate crude fell 1.3% to $67.55 a barrelGold was at $1,777.88 an ounce

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