Asia Eyes Muted Open, Oil in Focus During Tensions: Markets Wrap

(Bloomberg) — Asian stocks are set for a muted open as trading resumes after US shares edged higher Friday, buoyed by optimism of deep rate cuts next year. Oil advanced.

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Equity futures in mainland China point to an early rise while contracts for Japanese benchmarks were flat. Australian markets remain closed for a holiday. The S&P 500 notched an eight-week winning streak on Friday — the longest in more than five years on signs price pressures in the US were easing. US stock futures were little changed in Asia trading.

Some on Wall Street are positioning for further stock gains ahead as the session kicked off the start of the “Santa Claus rally” — a seasonal trend where equities tend to climb into the first few days of the new year.

“The soft landing narrative is fully in charge: The economy remains strong while inflation keeps trending down,” Louis Navellier of Navellier & Associates wrote. The veteran growth investor expects the year to end at highs, “the only ones with lumps of coal in their stocking this season are the bears.”

Oil edged higher after A.P. Moller-Maersk A/S said it’s preparing to resume shipping through the Red Sea, thanks to a new multinational maritime task force to protect vessels from attacks by Houthi rebels from Yemen. Japanese shipping stocks fell as much as much as 6.1% on Monday after rising 17% last week.

Geopolitical tensions however remain front of investors minds into the new year as tensions in the Middle East look set to increase. Iranian President Ebrahim Raisi said Israel will pay a price for killing a senior commander of its Revolutionary Guard in air strike in Damascus on Monday. The US accused Iran at the weekend of an attack on a tanker in the Indian Ocean.

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