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Rate cut bets boost stocks as bitcoin stalks $100,000
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Rate cut bets boost stocks as bitcoin stalks $100,000
Dec 4, 2024 6:37 PM

SINGAPORE (Reuters) - Asian stocks were mixed on Thursday in the wake of record peaks on Wall Street as a softer read on U.S. services data boosted investor confidence in the Fed lowering interest rates.

The S&P 500, Nasdaq and Dow all notched record highs overnight and bitcoin, at times a barometer of the mood, was back within a whisker of $100,000.

Over the past week and a half markets have all but priced in an extra U.S. rate cut for 2025 and the implied chance of a cut in December has lifted from even to around 75%.

MSCI's broadest index of Asia-Pacific shares outside Japan was slightly lower in early trade as selling in Hong Kong offset gains in Australia and Japan. Japan's Nikkei rose about 0.6% to hit a three-week high. [.T][.HK]

Hong Kong's Hang Seng fell around 0.8%.

The closely watched U.S. ISM survey showed services sector activity slowed in November after posting big gains in recent months. Benchmark 10-year Treasury yields fell three basis points to 4.182%. They were steady in Asia trade.

Federal Reserve Chair Jerome Powell made balanced comments at a New York Times event on Wednesday, describing the economy as in good shape but not really pushing back on market pricing for rate cuts.

Earlier this week Fed Governor Christopher Waller had said he was leaning towards a cut later in December. European retail sales figures and German factory orders are due later in the day, though the week's focus is on U.S. employment data on Friday where a strong reading could reverse bond-market moves.

"Generally data in the U.S. has continued to be pretty resilient," said RBC Capital Markets' chief economist in Sydney, Su-Lin Ong, noting measures such as the Atlanta Fed's GDPNow estimate are for solid growth at 3.2% in the fourth quarter.

"We think the market has got too much priced in."

S&P 500 futures slipped a tad while European futures fell 0.3%. German stocks are up 4% in a week and at record-high levels. [.EU]

BITCOIN NEARS $100,000

The dollar tracked U.S. yields lower in the foreign exchange market, although not by much. The euro was pinned at $1.0514 by political turmoil in France, where the government lost a confidence vote for the first time since 1962.

The yen has retraced some recent gains and expectations for a rate hike in December have unwound following press reports pointing to policymakers' likely caution.

It was a tad firmer at 150.31 per dollar on Thursday. The Australian dollar, at $0.6420, was nursing what was its heaviest fall in a month on Wednesday following weaker-than-expected growth data.

Bitcoin, which has surged since the election of Donald Trump as the next U.S. president was making another run to the eye-catching $100,000 mark as investors figure the incoming administration will be crypto friendly.

It was buying $98,200 in the Asia morning.

"At the end of the day, it's just a number," said Geoff Kendrick, global head of digital assets research at Standard Chartered.

"But the reality is we've been able to get to this level because the industry has become institutionalised this year particularly - and that's mostly the ETF inflows," he said, referring to exchange traded funds approved earlier this year.

Financial markets in South Korea were broadly steady after the president's abortive attempt to impose martial law late on Tuesday triggered volatility and a political crisis. [.KS]

In commodity trade lingering expectations of Chinese stimulus supported iron ore prices, while oil inched higher ahead of an OPEC+ meeting later in the day. [O/R]

The Organization of the Petroleum Exporting Countries and its allies in OPEC+ are likely to extend their latest round of oil production cuts sources told Reuters.

Brent crude futures rose 0.2% to $72.42 a barrel. Gold prices steadied at $2,649 an ounce. [GOL/]

(Editing by Sam Holmes)

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