China Equities climb after Tiktok decision
Wall Street sagged on Friday, with the S&P 500 falling 1.07%, the NASDAQ falling 1.07%, and the Dow Jones easing 0.90%. However, the presidential decision on TikTok over the weekend has seen US futures Byte Dancing into the green today, which is holding regional bourses steady in early trading. S&P 500 e-mini, NASDAQ and Dow Jones futures have risen in Asia, after the negative finish in New York. All three have climbed this morning strongly, with the S&P 500 and NASDAQ up over 0.50%.
Japan markets are closed, but the KOSPI has risen 0.20%. Mainland China though has grasped at the weekend TikTok news, sending the Shanghai Composite and CSI 300 leaping higher by 2.0% on the open. The rest of the Asia Pacific is circumspect, with Hong Kong down 0.60%, and Singapore and Sydney unchanged.
The TikTok agreement, should it pass in its current form, is a massive win for ByteDance, and should continue to buoy Chinese markets and US futures today. The feel-good factor will likely fade across the rest of the region as another US/China geopolitical sigh of relief fades. Much will depend on whether the US stock index futures can hold onto their early Asia gains, much as it has for the past three sessions.
The week ahead has little in the way of data front around the globe. China had just released its one and five-year Loan Prime Rate decisions, with rates remaining unchanged, as expected. That is entirely consistent with the intention of Chinese policymakers to stimulate the economy as needed in a much more targeted way and attempting to avoid another explosion in asset prices such as we saw post the GFC. Investors will have to wait patiently for some tier-1 data until the end of the week, with the release of US Durable Goods.