Markets opened the year on a cautious footing as mounting tensions in the Red Sea drove oil prices higher and weak Chinese data weighed on Asian shares.
US equity futures were little changed, while Europe’s Stoxx 600 traded 0.3% higher, buoyed by oil companies as traders awaited euro-zone manufacturing statistics. Chinese shares fell after the factory data and a speech from President Xi Jinping that flagged headwinds facing the economy.
Oil jumped after Iran dispatched a warship to the Red Sea in response to the US Navy’s sinking of three Houthi boats over the weekend, adding to pressure as ships continue to avoid the key waterway.
Bitcoin climbed above $45,000 for the first time in almost two years as anticipation of an approval of an exchange-traded fund investing directly in the biggest token intensified.
Signs of exhaustion have emerged after a more than $8 trillion surge in the S&P 500 last year.
“With an especially rare S&P nine-week winning streak already in the books, the index into resistance near the 4,800 level, and daily and weekly overbought readings, too, these factors combine to say we should expect some type of a consolidation, correction, or pullback — something,” John Roque, technical analyst at 22V Research, wrote in a note.
Sentiment in Asia was also dented after people familiar said ASML Holding NV, which makes semiconductor manufacturing equipment, canceled shipments of some of its machines to China at the request of US President Joe Biden’s administration.
The yen weakened against all of its Group-of-10 peers in thin trading as investors monitored conditions after an earthquake in Japan on Monday.
President Xi in his annual new year address televised Sunday pledged to strengthen economic momentum and job creation, while conceding some “enterprises had a tough time” and “people had difficulty finding jobs and meeting basic needs.”
Despite the persisting weakness in China, some investors consider a slump of almost 60% is a signal to buy Chinese stocks. Almost a third of 417 respondents to Bloomberg’s latest Markets Live Pulse survey say they will increase their China investments over the next 12 months.
Key events this week:
Some of the main moves in markets:
Stocks
Currencies
Cryptocurrencies
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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