Asian markets mixed as inflation plays against recovery optimism

Asian markets mixed as inflation plays against recovery optimism

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Hong Kong: Asian markets were mixed on Monday, as long-term concerns about inflation offset the economic data of the United States and China that undermined forecasts, and after Pfizer expressed its optimism that its Covid treatment pills are optimistic about the global reopening, the tourism-related industry The company’s rise is very effective.

After data showed that the United States created more than 500,000 new jobs last month, Wall Street’s three major indexes hit a record high last week. With the decrease in new infections across the country, the number of recruits rebounded. The data for the first two months has also been revised upwards.

The news provided fresh evidence that the world’s top economy is well on the recovery track as life slowly returns to some semblance of normal.

But optimism continues to be held back by worries about inflation, which has surged this year owing to a pick-up in demand, a spike in energy prices and supply chain snarls — forcing central banks around the world to start rowing back their massive pandemic-era support measures.

“Inflation is the major headwind right now,” Dana D’Auria, at Envestnet, told Bloomberg Television.

Adding to inflation expectations is Joe Biden’s $1.2 trillion infrastructure bill that finally passed through Congress on Friday, giving the president a much-needed boost in his plan to push through vast spending measures to support the economy.

However, another proposal to allocate another $1.9 trillion for social and environmental programs continues to be shelved.

Immediately after the US employment report, China said exports surged by 27.1% in October, better than expected, because factories kept outflows despite power outages due to emission reduction targets, soaring coal prices and supply problems in recent months. .

Traders are paying close attention to Beijing because the CCP will hold a key meeting this week, and Xi Jinping may strengthen the control of power while hoping to strengthen the government’s control over the economy.

Xi Jinping’s “shared prosperity” initiative to promote wealth redistribution has led the authorities to suppress a series of industries that have disrupted the market in recent months, especially technology companies.

Pfizer said on Friday that clinical trials of its pill for the treatment of Covid-19 showed an effective rate of 89%. After that, companies focused on the tourism industry surged, adding that this was a big step towards getting rid of the pandemic. Pfizer is the second anti-coronavirus pill after Merck.

At the same time, Scott Gottlieb, a member of Pfizer’s board of directors and former director of the Food and Drug Administration, told CNBC’s Squawk Box that the pandemic may end in the United States in January.

The news about the treatment has increased the hope that more countries will soon reopen to foreign travelers, which has pushed airlines soaring.

China Airlines and Air China each rose more than 10%, while Japan Airlines and Hong Kong Cathay Pacific rose about 5%.

Macau casino buying is also strong, with Sands China soaring 9%, MGM China and Galaxy Entertainment up more than 6%.

After OPEC and other major oil-producing countries refused to listen to Biden’s call to increase production to meet the surge in demand last week, oil prices continued Friday’s rise, while US officials are considering releasing some of the country’s strategic supplies to reduce gasoline prices. .

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