Asian Stocks Mixed, amid $1.9 Trillion American Rescue Plan

Asia Pacific stocks were mixed on Friday morning, with U.S. President-elect Joe Biden’s announcement of his mega stimulus plan.

By 9:21 PM ET (2:21 AM GMT) Japan’s Nikkei 225 dropped 0.27%. South Korea’s KOSPI declined 1.84%. Moreover, Australia’s S&P/ASX 200 rose 0.25%.

Hong Kong’s Hang Seng Index added 0.05%.

In China, Shanghai Composite climbed 0.59%, while the Shenzhen Component fell 0.83%. President Trump added Xiaomi (OTC:XIACF) (HK:1810) and China National Offshore Oil (CNOOC (NYSE:CEO)) to its blacklist.

Xiaomi was among the nine companies added to the Defense Department’s list of Chinese companies with links to the military. Aside from Smartphone maker Xiaomi, state-owned planemaker Commercial Aircraft Corp. of China Ltd. (Comac) is another firm on the list.

Moreover, the Commerce Department blacklisted CNOOC., the nation’s main deepwater explorer. This was over the Chinese company’s drilling in disputed South China Sea waters.

Biden’s “American Rescue Plan”

On Thursday, Joe Biden unveiled his “American Rescue Plan,” which is the $1.9 trillion COVID-19 relief plan. It includes a wave of new spending and more direct payments to households. Moreover, an expansion of jobless benefits and enlargement of vaccinations and virus-testing programs.

The President-elect’s announcement pushed U.S. shares into positive territory during most of the previous session. Some investors, however, expressed concerns about the plan’s cost.

Federal Reserve Chairman Jerome Powell said at a Princeton University virtual symposium that the Fed would raise interest rates. He said that would be “no time soon” unless they see troubling signs of inflation. 

He added that policymakers would “let the world know” well before deciding to taper bond purchases. Powell’s comments further steepened the yield curve and saw breakeven rates climb.

Further, in stock market news, earnings season swings into full gear. That is with JPMorgan (NYSE:JPM), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) announcing their results later in the day.

Investors will want to check if banks are starting to take down credit reserves. They will want to see if banks are now resuming buybacks and providing guidance that shows the economy is improving. This was according to Great Hill Capital chairman Thomas Hayes.

Wall Street Ends Lower; Stimulus Hopes, Jobs Data

Meanwhile, Wall Street closed lower on Thursday following a u-turn toward the end of the session. Reports about U.S. President-elect Joe Biden’s pandemic aid proposal emerged after earlier data that showed a weakening labor market.

Last week, the Labor Department’s weekly jobless report showed the number of Americans filing first-time claims for unemployment benefits increased. This increase was more than expected, highlighting the impact of a resurgence in COVID-19 infections.