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October 04, 2018 at 01:18 PM
U.S. stock investors are showing signs of being less jittery than their Asian peers as a rout in Treasuries deepens.
Futures contracts on the S&P 500 Index fell as much as 0.5 percent in Asian trading, building on a move that saw the underlying gauge pull back from a fresh all-time high on Wednesday as government bonds extended their slump. The MSCI Asia Pacific Index fell as much as 1.2 percent as the dollar strengthened.
The current bond selloff is casting minds back to February when the prospect of runaway inflation and fears that higher interest rates could hurt profitability were enough to cause a correction in U.S. stocks. The benchmark index had its worst monthly performance in two years after slumping 10 percent in nine sessions from a record high on Jan. 26.
Not so much this time, as companies have proved they can withstand a higher rate environment, said Alva Devoy, a managing director at Fidelity Investment Management. “Your cost of capital has doubled in the last year, yet look at the out-turn we just had in the earnings season. It’s been phenomenal.”
