Asian stocks rose on Friday, with Japan’s benchmark index reaching new five-month highs amid reports that the Federal Reserve was pledging more liquidity to prop up the financial markets.
Asian Markets Rise
Stocks across the Asia-Pacific region rose in the final session of the week. Tokyo’s benchmark Nikkei rallied 0.4% and was on track for its highest settlement since late April. The Nikkei is up 6.9% over the past month and 10.6% since the start of 2019.
Mainland China’s CSI 300 Index rose 0.2%. The benchmark Shanghai Composite Index also rose 0.2%. In Hong Kong, the Hang Seng Index rallied 0.3%.
The ASX 200 Index, Australia’s primary equities benchmark, was up 0.6% midday.
Fed Carries Out Third Repo Operation; Plans Fourth
The Federal Reserve stepped into the financial markets again on Thursday in another desperate attempt to keep short-term interest rates from rocketing higher.
For a third straight day, the New York Federal Reserve Bank conducted a repurchase operation to ensure local banks have enough liquidity to finance their day-to-day operations. The Thursday repo operation was valued at$75 billion, matching Wednesday’s level and much higher than the $53 billion pledged on Tuesday. All said, the U.S. central bank has injected $203 billion into the markets this week.
Anthony Pompliano, a renowned bitcoin bull and opponent of central-banking, tweeted late Thursday that the New York Fed was planning a fourth repo operation on Friday worth $75 billion.
“That will be more than $275 billion total in four days this week,” he said.
UPDATE: The NY Fed is planning to inject another $75 billion into the financial system on Friday (tomorrow).
That will be more than $275 billion total in four days this week.
Add in the two recent rate cuts & you could argue that the Fed is fighting the start of a recession…
— Pomp 🌪 (@APompliano) September 19, 2019
Prior to this week, the Fed’s last repo operations came in the aftermath of the 2008-09 financial crisis.
U.S. Stock Futures Edge Higher
Futures on U.S. equities traded slightly higher on Friday, pointing to a modest start to the New York session. Dow Jones Industrial Average (DJIA) futures were up 26 points, or 0.1%. S&P 500 futures advanced 0.1%. The Nasdaq 100 mini futures contract was also up 0.2%.