Equities fall with US futures

US markets higher, but Asia quiet

Asian markets are following the dentists of Minnesota this morning, who have sold US index futures this morning after no new stimulus package appeared from Washington DC. US data had lifted stocks in New York time with the S&P 500 rising 0.56%, the Nasdaq climbing 1.44% and the Dow Jones edging 0.17% higher.

Hopes fade over stimulus deal

There had been growing hopes over the past few sessions that the US Republicans and Democrats were edging closer to a new fiscal stimulus package, but it appears that a sense of Deja vu has swept markets this morning. By my calculations, the stimulus spread was at $1.6 trillion/$2.2 trillion as of yesterday, far apart, but less insurmountable then previous weeks. Unfortunately, it appears there is no sign that either the Democrats or the Republicans are prepared to cross the spread, or even meet in the middle ahead of a soft Thursday deadline US time. That has seen US equity index futures fall this morning in Asia and has dampened sentiment across the region.

Overnight, the US data showed that the economic recovery remained intact, albeit at a slowing pace, mostly due to the impasses described above. ISM and Market Manufacturing PMI’s and sub-indexes outperformed. Initial and Continuing Unemployment Claims both dropped again, notably the continuing component, which fell by 1 million. One note of caution in these figures is that California is not contributing data to these numbers for two weeks, and thus, they could be subject to some significant revisions.

Tokyo has reopened after being closed all day yesterday with technical problems. The Nikkei 225 falling 0.40% this morning. Singapore has edged 0.35% lower while Sydney’s schizophrenic price action continues. Banks and resources led Australia higher yesterday; both sectors have been thrashed this morning, leaving the ASX 200 and All Ordinaries down 0.75%.

Tail chasing by Australian markets aside, with so much of Asia on holiday today, the session is likely to remain a quiet one ahead of US data this evening, with all eyes on the Nonfarm Payrolls release.

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