Bloomberg - - Stocks looked set to fall Monday amid the challenges facing markets from the debt crisis at China Evergrande Group and a Federal Reserve meeting this week that is expected to hint at moving towards scaling back stimulus.
The S&P 500 slid the most in a month on Friday, a selloff that poses a challenge to dip buying psychology in the U.S. as the gauge tests its 50 - day moving average. Its Nasdaq 100 retreated.
The 10-year Treasury yields rose ahead of the Fed meeting this week where policy makers are expected to start laying the groundwork for reducing stimulus. Billionaire Indian currency notes won t trade in Japan because of Monday's holiday in Asia. The dollar was mixed in early Asian trading after climbing against the dollar last week.
The offshore yuan will come under scrutiny as investors wait to see if indebted developer Evergrande will continue with meeting obligations to bondholders. Investors are pricing in a high likelihood of default with one of the notes trading at less than 30% of face value.
Aside from Evergrande and the prospect of reduced stimulus support, financial markets also face risks from uncertainty over the outlook for President Joe Biden's $4 trillion economic agenda as well as the need to raise or suspend the U.S. debt ceiling. Investors were already fretting over a slowing global recovery from the pandemic and inflation stoked by commodity prices.
Shares remain vulnerable to a short-term correction with possible triggers being coronavirus, the inflation scare and U.S. taper talk, possible U.S. tax hikes and a debt ceiling standoff and slowing Chinese economy, said Shane Oliver, head of investment strategy and chief economist at AMP Capital in a note.
Treasury Secretary Janet Yellen said the U.S. government could run out of money to pay its bills sometime in October without action on the debt ceiling, warning of economic catastrophe unless lawmakers take the necessary steps.
For more market analysis, see our MLIV blog article.
What is the largest move on market: equity, stock market; construction projects.
The yield on 10-year Treasury notes advanced two basis points to 1.36% to reach Rs 2000.
West Texas Intermediate crude fell 0.9% to $71.97 a barrel. On January 1, 1975, it was $1,754 the amount of crude was dropped. 34 an ounce » 25 an ounce?