By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Tuesday morning, after U.S. shares declined for the first time in five sessions overnight.
Japan’s inched up 0.06% by 9:35 PM ET (2:35 AM GMT), with markets reopening after a holiday. Prime Minister Yoshihide Suga said earlier in the day that he would declare a state of emergency for Osaka, Kyoto and Hyogo prefectures, extending the one declared for the Greater Tokyo area during the previous week.
South Korea’s fell 0.49% and in Australia, the inched down 0.03%.
Hong Kong’s was up 0.43%.
China’s was up 0.44% and the gained 0.46%.
Investors were also weighing whether equities are running too hot, and if valuations are too stretched. Ten-year Treasury yields were at 1.15%, climbing to their highest level since March 2020.
Benchmark Treasury yields surpassed the 1% mark during the previous week over hopes that a Democrat-controlled Congress would pass big stimulus packages to drive economic recovery from COVID-19. President-elect Joe Biden is due to lay out proposals for “trillions” of dollars in fiscal support on Thursday.
However, higher yields could jeopardize current easy financial conditions and reset expectations for a range of asset classes.
“Ultimately it goes back to the 10-year,” Lynx Equity Strategies’ KC Rajkumar and Jahanara Nissar said in a note.
A higher yield “points to higher inflation down the road, which is negative for stocks. We are not there yet, but as the 10-year inches higher, the closer we get,” the note added.
However, other investors were more optimistic.
“People are optimistic to see the yield curve steepening and it could help spreads and net interest margins for banks,” Great Hill Capital chairman Thomas Hayes told Reuters.
Big tech giants, including Twitter Inc (NYSE:), Amazon.com Inc (NASDAQ:), Alphabet Inc (NASDAQ:), Facebook Inc (NASDAQ:) and Apple Inc (NASDAQ:) also fell. Twitter shares fell up to 6.4% and Facebook also saw its shares fall on Monday. Both companies suspended U.S. President Donald Trump’s accounts on their platforms, in Twitter’s case permanently, over the events that took place in Capitol Hill during the previous week.
“The weakness was led by tech and I think the banning of Trump’s account by Twitter and Amazon stepping up against Parler all brought a renewed focus on increased regulation and reining in on tech,” Great Hill Capital’s Hayes said.
Concerns are rising that further violence could take place as House of Representatives Democrats introduced a resolution on Monday to impeach Trump for the second time. A vote will take place later in the week unless Vice President Mike Pence makes use of his constitutional authority to remove Trump from power.
However, Trump and Pence reportedly agreed to work together until Jan. 20, when Biden and his administration are due to begin their terms, during a meeting on Monday.
The U.S. will release a slew of data later in the week, starting with December’s on Wednesday. Data on December’s , and will follow on Friday.
European Central Bank President Christine Lagarde will speak at an online conference Wednesday, while Federal Reserve Chairman Jerome Powell is scheduled to take part in a webinar on Thursday.