Asia Stocks Set for Modest Gains; Oil Up From Lows: Markets Wrap

Asian stocks looked set to follow their U.S. peers higher as investors took some comfort from earnings reports and signs the coronavirus outbreak is easing. Oil jumped and Treasuries fell.

Equity contracts rose in Japan, Hong Kong and Australia. The S&P 500 Index rebounded from the worst sell-off in three weeks amid quarterly results. Chipotle Mexican Grill rose onsales that topped estimates, while Texas Instruments advanced on solid results. Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August. House lawmakers on Thursday are set to pass another round of aid.

The oil market continued to hold investor attention. A day after trading negative, futures for West Texas Intermediate crude surged above $13 a barrel after President Donald Trump ordered the Navy todestroy any Iranian gun boats that harass American ships at sea. The biggest oilexchange-traded fund reshuffled the mix of futures it owns to track crude prices for a second day, extending their average expiration amid unprecedented volatility in its markets.

Investors are continuing efforts to assess the pandemic’s damage to the global economy, with the oil market chaos suggesting it will be deeper or longer than anticipated by those who drove the S&P 500 up 28% from its March lows. Governments are devising ways to return people to work even as they discover infections are more extensive than they insisted only weeks ago.

“For sure with this volatility we’ve seen year-to-date we are seeing value now appearing in Asian markets,” Wey Fook Hou, chief investment officer at DBS Group, said on Bloomberg TV. “For this recovery to be sustainable we really need to see the cases come down and economies gradually reopening.”

Next up are China Life and Ping An Insurance, which may report big drops in first-quarter new business as lockdowns hit sales. Heineken NV earlier canceled its interim dividend, while Kering said it doesn’t see a recovery in the U.S. or Europe before at least June or July after sales at its flagship brand Gucci tumbled.

On the virus front: New York deaths were at the lowest rate since early April. Spain’s parliament backed the prime minister’s request to extend a state of emergency to May 9.

These are the main moves in markets:

Stocks

  • The S&P 500 rose 2.3% on Wednesday.
  • Futures on Japan’s Nikkei 225 gained 0.9%.
  • Hang Seng futures earlier advanced 0.1%.
  • Futures on Australia’s S&P/ASX 200 Index gained 0.9%.

Currencies

  • The yen was at 107.78 per dollar.
  • The offshore yuan traded at 7.0991 per dollar.
  • The euro bought $1.0822.

Bonds

  • The yield on 10-year Treasuries rose five basis points to 0.62%.

Commodities

  • West Texas Intermediate crude expiring in June rose 23% to $14.23 a barrel.
  • Gold was at $1,714.18 an ounce.

— With assistance by Vildana Hajric, and Claire Ballentine

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