Stocks Gain as Powell, China Policy Soothe Nerves: Markets WrapMore
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Stocks across Asia kicked off the week with strong gains after soothing Federal Reserve comments and an easing of monetary policy in China stoked a renewed appetite for risk assets. The dollar fell to the lowest in more than two months against peers.
Shares in Japan led the charge, with advances also in Hong Kong, South Korea and Australia. U.S. futures climbed, signaling Friday’s rally in U.S. stocks could continue, and European futures also rose. Federal Reserve Chairman Jerome Powell said policy is flexible and officials are “listening carefully” to financial markets, while the People’s Bank of China cut the required reserves for banks.
Treasuries steadied after Friday’s slide that sent yields soaring back to 2.67 percent. Fresh talks between the U.S. and China on trade, and Powell’s remarks sapped demand for the dollar as the yen led gains in G-10 currencies.
“It’s probably an opportunity to buy the dips if you are underweight equity allocations,” Raymond Lee, managing director and portfolio manager at Kapstream Capital, said on Bloomberg TV. “I do think going forward you are probably not likely to see that type of move where equities sell off 20 percent in the space of six weeks, but generally volatility will be higher than what you saw in 2017 and the first half of 2018.”
Powell’s remarks are helping to lift sentiment that’s been hammered as global equities posted their biggest annual loss since the financial crisis, easing concerns the Fed is determined to raise rates even as global economic growth cools and markets tumble. Even after the slump in Treasuries at the end of last week, 10-year yields remain more than 50 basis