Global stocks were inching higher on Wednesday, with the exception of Asian markets, which got clobbered by news of a trading tax hike in Hong Kong. That is as investors kept watch on interest rates and waited to hear from Federal Reserve Chair Jerome Powell again.

Up 9% so far this year, the Hang Seng Index slid nearly 3% and China’s CSI 300 dropped 2%. Investors reeled from news the government plans to slap a 30% tax hike on share trading. Worst hit was stock exchange operator  Hong Kong Exchanges and Clearing, with those shares down more than 8%.

The news rippled across to London, where the FTSE 100 struggled as shares of banking giants HSBC and Standard Chartered, both with major operations in Hong Kong, extended losses from the Asian session.

The Stoxx Europe 600 rose 0.5% , with the German DAX index up 0.7% after fourth-quarter gross domestic product rose a better-than-expected 0.3%, beating a preliminary estimate of 0.1% along with forecasts.

Meanwhile, U.S. stock futures indicated a slightly higher start for Wall Street, which closed out Tuesday’s session with modest gains for the Dow Jones Industrial Average and S&P 500, and a 0.5% fall for the Nasdaq Composite, as technology stocks and growth names continued a selloff that has stretched over several days. But Nasdaq-100 futures indicated a bit of a bounce ahead for that sector.

The 10-year Treasury yield was holding at 1.36%, still hovering at the highest levels seen in the year.

Wednesday also marked the first anniversary of the first Covid-19 market slump, which was sparked by news of soaring Italian cases. The S&P 500 fell by over 3% and 10-year Treasury yields fell 10 basis points, noted a team of strategists at Deutsche Bank, led by Jim Reid.

“The path of things over the last 12 months means we should be relatively humble about our forecasts for the next 12 months,” given the Nasdaq is up over 46% and the S&P by around 20%, said Reid.

“I suspect we are in a bubble in certain places, that stimulus checks will provide more fire to that at some point, but that risk assets are going to be constantly buffeted by the risk of higher yields and inflation regardless of whether it has any structural roots or not,” he said.

Investors will get data on new home sales and the second day of testimony on Capitol Hill by Fed Chair Powell. In testimony on Tuesday, he told Congress that the central bank saw no need to stray from the path of keeping interest rates ultralow, as the recovery “remains uneven and far from complete.”

 

Source: FactSet

Investors will hear from home-improvement retailer Lowe’s, discount chain TJX, and amusement park group Six Flags before the market open, followed by chip maker Nvidia, multinational telemedicine and virtual healthcare company Teladoc Health, and cloud and data services company NetApp after the close.

Shares of GameStop fell in premarket trading after the videogames retailer said late on Tuesday that its chief financial officer Jim Bell  will resign on Mar. 26. The company’s stock skyrocketed in late January, thanks to boosts from Reddit and other social-media posts.

Shares of Square tumbled in premarket, after the mobile payments and financial services company said first-quarter financial trends were only slightly better than the December quarter.

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