1. Nasdaq Leads Surge in Futures as Bonds Rebound
Contracts on the tech-centric Nasdaq 100 rose 2.2% while those on the S&P 500 advanced 0.9%. Markets have been gripped by volatility in tech stocks this week and the Nasdaq 100 has fallen 11% from an all-time high. Investors will be closely watching Treasury sales in the coming days, with the U.S. planning three debt auctions totalling $120 billion. The sales will test appetite for the safest debt after last month’s poorly bid auctions sent shockwaves throughout global markets and short bets climbed to a record. Benchmark 10-year yields traded sharply lower after breaching the 1.6% level to trade at a one-year high last week.
Futures on the S&P 500 Index advanced 0.9% as of 8:30 a.m. New York time.
The Stoxx Europe 600 Index gained 0.5%.
The MSCI Asia Pacific Index increased by 0.4%.
The MSCI Emerging Market Index decreased by 0.2%.
2. Worst-Performing Asia Stock Index Turns Winner on Value Love
Singapore could be the biggest comeback story for Asian equities this year. After becoming the region’s worst performer in 2020 following a 12% slump, the Straits Times Index has surged 9.3% to trounce all other major Asian benchmarks so far this year. That’s come in the wake of a tech rout that saw the Nasdaq 100 enter a correction amid rising U.S. Treasury yields. Singapore’s market revival echoes the global trend of value investing as investors bet on an economic rebound. The island nation’s market is dominated by old economy shares, with more than 80% of the index made up of cyclical stocks without technology and communication services — among the highest contributions in Asia.
3. Bitcoin Hits Highest Level in Two Weeks as Big-Money Bets Flow
Bitcoin rallied to a two-week high, with prices hovering near $54,000 as the digital currency rides a wave of investor demand for crypto assets. The token rose 3.8% to $53,850 in early U.S. trading on Tuesday. While high-flying bets like Tesla and the ARK Innovation ETF have cratered recently, Bitcoin has steadily climbed on news of more institutional involvement in crypto. The narrative that longer-term investors such as family offices, insurers and corporate treasurers are adding exposure to tokens is controversial but gaining traction. Goldman Sachs Group recently said it’s seeing substantial demand from institutions as it works to restart its cryptocurrency trading desk.
4. China’s $1 Trillion Stock Rout Tests Limit of State Intervention
A world-beating rally in Chinese stocks has turned into the biggest rout globally, shocking investors with the severity of its reversal and evading state efforts to slow the pace of losses. In just 14 trading days, the nation’s benchmark CSI 300 Index has plummeted 14% from a 13-year high. That compares with a 3.3% drop by the MSCI All-Country World Index. The plunge has wiped out more than $1 trillion of value and hammered the holdings of retail investors who piled in at the peak, betting that the new lunar year of the Ox, or bull, would be auspicious. State intervention on Tuesday briefly arrested the tumble, before losses resumed.
5. Pfizer-BioNTech Covid Shot Neutralizes Brazilian Strain in Lab
The Covid-19 vaccine from Pfizer and BioNTech showed a high ability to neutralize coronavirus strains first detected in Brazil, the U.K. and South Africa. In lab experiments, the shot demonstrated “roughly equivalent” levels of neutralizing activity against the Brazil and U.K. strains compared with a version of the virus from early last year. It also showed “robust but lower” activity against the South Africa variant. While the research needs to be validated with real-world data, it offers another reason for optimism that the Covid vaccines are generally performing well against variants of the virus.
6. Oil Flirting With $70 Challenges World’s Economic Recovery
The spike in oil prices has focused attention on how the steady rise in energy costs is threatening to create a drag on the global economic recovery and stoking fears of inflation. After surging more than 30% this year on coordinated supply constraints by major exporters and demand returning from the depths of the Covid-19 crisis, a missile attack Sunday on a key Saudi Arabian export facility sent Brent crude, the international benchmark, above $70 a barrel for the first time since January 2020. While prices have since pulled back, the impact on inflation and the overall global recovery depends on how sustained the underlying rally proves to be. For economists, the cause of higher prices is what matters, rather than the price itself. Rising energy costs on the back of strong demand normally indicate robust and resilient growth, while a surge from crimped supply could weigh on a recovery.
7. Haunted by 2008, China and U.S. Diverge on Stimulus Plans
The U.S. and China are pursuing divergent economic policies in the aftermath of the coronavirus recession in a role reversal from the last time the world economy was recovering from a shock. One of the takeaways from the annual National People’s Congress underway in Beijing is a conservative growth goal, with a tighter fiscal deficit target and restrained monetary settings. That’s a big contrast with Washington, where President Joe Biden is preparing a second major fiscal package after he gets final approval for his $1.9 trillion stimuli. The widening policy divergence is putting strains on exchange rates and could potentially reshape global capital flows. It stems, in part, from different policy lessons from the 2007-09 crisis.
8. Hedge Fund Investors Rush for Private Deals With IPOs Surging
Investors are increasingly betting on private markets — and they want to use hedge funds to do so. Private markets equities have emerged as the strategy most in-demand among non-traditional offerings from hedge funds. The appetite for growth and venture capital investments is increasing as private companies and unicorns become a larger part of the capital markets ecosystem. More than half of the investors surveyed said they are now using hedge funds to access private markets. That figure rises to more than 70% for family offices, endowments and foundations.
9. Biden Faces Tougher Obstacles for Broad Relief Bill Sequel
President Joe Biden’s soon-to-be-unveiled longer-term economic stimulus package is set for far tougher obstacles in Congress than the pandemic-relief bill that’s on the verge of squeaking through without a single Republican’s backing. The “build back better” program that the White House says will be announced after Biden signs the $1.9 trillion aid bill — heading for final passage as soon as Tuesday — will be far more expansive than its predecessor. Biden has the same three options as for his first package: go without the GOP on a bill that’s as expansive as moderate Democrats and Senate rules will allow, dramatically scale back ambitions to lure at least 10 Senate Republicans, or split the program up and pursue a combination of approaches.
10. Carlyle-Backed China Biotech Firm Plans Hong Kong IPO
Abbisko Therapeutics, an oncology-focused Chinese biotech company, is planning a Hong Kong initial public offering that could raise about $250 million. Abbisko, which is backed by investors including Carlyle Group and Warburg Pincus, is working with advisers on the offering. The company aims to list as soon as this year. The Shanghai-based company joins a growing wave of health-care and biotech firms listing in Hong Kong after a record year for share sales in the sector. So far this year seven health-care companies have debuted in the city, raising a combined $2.1 billion. Abbisko raised $123 million in a Series D funding round in January which was led by Carlyle, Warburg, OrbiMed Advisors and Lake Bleu Capital. That brought its total fundraising to $263 million.
Curated from Bloomberg.com