Stocks and futures dip on US fiscal-relief package timing; dollar up

Stocks fell along with US futures Tuesday as investors mulled a possible delay in the planned US fiscal- relief package against a backdrop of concern that some markets are overextended. The dollar advanced.

A gauge of Asia-Pacific equities at one point slid the most in about two months, with shares in South Korea and China underperforming. Tencent Holdings’ slump led Hong Kong stocks lower after the internet giant’s market value rose to the cusp of $1 trillion for the first time Monday. The People’s Bank of China unexpectedly withdrew funds from the financial system as an advisor discussed the risk of asset bubbles in local media.

S&P 500 futures slipped as Senate Majority Leader Chuck Schumer said an aid package was unlikely before mid-March and a US health official expre­ssed concern about vaccination delays. Nasdaq 100 contracts also pointed lower, with investors awaiting earnings from some of the biggest companies. Elsewhere, Treasuries held an overnight climb and crude oil fluctuated under $53 a barrel. European equity futures were little changed.

Global stocks have retreated from a record as investors look for fresh catalysts to push them higher or at least justify current valuations. That could come from a slate of earnings reports due this week. Meanwhile, the possibility that a US fiscal-relief package might be delayed is undercutting a key reason why Treasury yields climbed earlier this year. “If financial markets needed any further confirmation that the U.S. fiscal stimulus was the only game in town, the buy- everything herd received it overnight,” Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte., wrote in a note.

Disquiet from Senate Republicans over the size of the planned package “was enough to knock equities off their intraday highs,” send bond yields lower and spur demand for the dollar, he said. 

President Joe Biden said he’s open to negotiation on his $1.9 trillion Covid-19 relief proposal, and is hopeful to bring Republicans behind it, though didn’t rule out pursuing a Democrat-only route. Schumer said earlier Monday he aims to secure passage of the next round of relief by mid-March, just when jobless benefits from the last package will be running out.

On the pandemic front, vaccine coverage won’t reach a point that would stop transmission of the virus in the foreseeable future, the World Health Organization. US infectious-disease chief Anthony Fauci said he’s worried about delays to second doses.