By Adam Haigh – Bloomberg.com
- Initial jobless claims worse than forecast for second week
- Several U.S. states are recording new coronavirus outbreaks
The Federal Reserve told the biggest U.S. banks they can’t increase dividends or resume buybacks through at least the third quarter as uncertainty over the course of a global pandemic weighs on lenders.
Asian stocks climbed Friday after a late rally in U.S. shares, as investors weighed the prospects for additional stimulus against the spike in American virus cases. The dollar edged higher.
Shares rose in Japan and South Korea, on below average volumes. Australia also saw gains, while Hong Kong reopened to modest declines following Thursday’s holiday. China was closed. S&P 500 futures were little changed after a rally in the final hour of a choppy session left the index up about 1%. Treasuries were steady.
Banks surged in the U.S. session after regulators eased rules that will free up capital, though they slid after-hours as the Federal Reserve told the biggest lenders they can’t increase dividends or buybacks for now. Investors also grappled with a mixed batch of economic data, with initial jobless claims topping estimates at almost 1.5 million.
Worries over lockdowns being reimposed and economies re-opening more slowly has hurt sentiment, as investors weigh reports of new daily records for infections. One of the highest increases yet in U.S. cases prompted Texas and Florida to halt their next reopening phases, while health leaders called on the U.K. to prepare for a possible second wave.
The Fed “is going to support this market one way or the other,” Sandy Villere, portfolio manager at Villere & Co., said on Bloomberg TV. Still, “I think there are going to be a few more dips to come. It’s amazing, the market doesn’t care about fundamentals or earnings at this point, they care about the pandemic and the pandemic only.”
Elsewhere, oil prices rose after Russia slashed exports of its flagship crude Urals to the lowest in at least 10 years. Gold was little changed.
Here are some key events coming up:
- A rebalance of Russell indexes is due on Friday.
These are some of the main moves in markets:
- Futures on the S&P 500 fell 0.1% as of 11:37 a.m. in Tokyo. The index rose 1.1% on Thursday.
- Japan’s Topix index advanced 0.8%.
- Hong Kong’s Hang Seng dipped 0.6%.
- Australia’s S&P/ASX 200 Index gained 0.7%.
- South Korea’s Kospi index rose 0.7%.
- Euro Stoxx 50 futures advanced 0.7%.
- The yen was at 107.19 per dollar, little changed.
- The offshore yuan was at 7.0768 per dollar.
- The Bloomberg Dollar Spot Index added 0.1%.
- The euro bought $1.1218.
- The yield on 10-year Treasuries remained at 0.68%.
- Australia’s 10-year yield was at 0.87%.
- West Texas Intermediate crude oil rose 1.1% to $39.14 a barrel.
- Gold was at $1,762 an ounce, down 0.1%.
— With assistance by Claire Ballentine, Amena Saad, and Joanna Ossinger