Tag: Asian stocks

Asia equities mixed as markets shut for holidays

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stocks in Asia struggled for traction Friday after US shares inched to a record as many markets in the region shutdown for public holidays.

Futures contracts for Hong Kong’s Hang Seng Index fell, indicating a third daily decline for the index, which has faced volatile trading this week as China attempts to stem the country’s equity market slump. Prior efforts to arrest market declines, notably in 2015, may not work this time around, investors warn.

The Golden Dragon index of US-listed Chinese companies fell 1.1% in New York, indicating further pressure ahead in a day disrupted by holidays, including for Chinese New Year. Markets will close early Friday in Hong Kong and Singapore and will be shut in mainland China, Taiwan, South Korea, Indonesia, the Philippines and Vietnam.

The S&P 500 closed 0.1% higher, just below 5,000 index points — a threshold it hit during the session on Thursday. The closing level set a fresh high. The Nasdaq 100 rose 0.2%. US futures were little changed early Friday.

“Our base case remains for a soft landing for the US economy, with the S&P 500 ending the year around current levels,” Solita Marcelli at UBS Global Wealth Management said in a Thursday note. “However, recent economic data have highlighted the potential for a period of continued stronger growth, tame inflation, and swifter monetary easing. In this event, we believe the S&P 500 has the potential to rise to around 5,300 this year.”

Australian equities were little changed and Japanese stocks traded within tight ranges, with the weaker yen offering some support. The currency steadied after slipping 0.8% against the greenback on Thursday, in the wake of comments from a Bank of Japan deputy governor suggesting the central bank will be in no rush to shift its easy policy settings. An index of the dollar rose 0.2% Thursday.

Japan-listed SoftBank Group Corp. rallied as much as 10% after exceeding net income forecasts in its latest quarterly results and from further gains for Arm Holdings Plc, in which it owns a stake. Nissan shares slipped more than 9% after the company missed profit estimates.

Treasuries were little changed in Asian trading after a decline on Thursday. Selling came even the US government sold $25 billion in 30-year bonds at a lower-than-expected yield, in a sign of healthy demand. The 10-year yield rose three basis points Thursday and has added 13 basis points this week as investors adjust interest rate forecasts on strong economic data and comments from central bank policymakers.

Federal Reserve Bank of Richmond President Thomas Barkin was the latest to reiterate the central bank has time to be patient before cutting rates. Fresh data on Thursday also underscored US economic resilience. Jobless claims fell just shy of consensus predictions, in a sign the labor market remains strong.

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Elsewhere, New Zealand yields and the currency climbed after ANZ Bank New Zealand Ltd. forecasted the central bank to raise interest rates twice more this year.

Inflation Revisions

Interest rate forecasts could receive another jolt later Friday when the US revises monthly inflation data. Investors will be watching closely after last year’s revision cast doubt on the Fed’s progress in taming consumer prices.

“CPI revisions could throw cold water on the recent good inflation numbers — but this is a wonky number,” said Andrew Brenner at NatAlliance Securities. “We think the next move comes off the CPI number next Tuesday.”

Elsewhere, Treasury Secretary Janet Yellen said US regulators are monitoring risks stemming from nonbank mortgage lenders, and cautioned that a failure of one of them is possible in the case of market strains.

Bitcoin topped $45,000. Oil rallied amid doubts over a potential cease-fire in the Israel-Hamas war.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia shares climb as China, Fed outlook lift mood

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks rose as China’s largest banks reportedly prepare to cut interest rates and investors speculate that the Federal Reserve is nearing the end of its tightening campaign.

Hong Kong equities extended gains into a third day as they opened one percent higher Tuesday, while mainland China shares also climbed and other benchmark indexes in the region advanced. News that Chinese state-owned lenders will reduce rates on the majority of the nation’s outstanding mortgages, as well as on deposits, boosted sentiment.

Investors may be starting to take into consideration that policy responses coming out of China focus on the nation’s long-term growth, according to Catherine Yeung, investment director at Fidelity International. “If we do see these reforms work, from a top-down perspective, it could actually really see sort of a floor for the markets,” she said on Bloomberg Television.

US equity futures were little changed in Asian trading. American shares had climbed the most since June on Tuesday and bond yields retreated after job openings fell by more than expected, offering fresh evidence that labor demand is slowing in the world’s largest economy, taking pressure off the Fed. Separate data showed consumer confidence dropped amid souring views on jobs, higher borrowing costs and lingering inflation.

The US economic data triggered lower wagers in swap contracts for a Fed hike in 2023, and a greater chance of a policy pivot in the first half of 2024. Traders also brought forward bets on the expected start of rate cuts to June from July of next year.

Also Read: Largest shareholder of troubled Chinese shadow bank plans to delist

Treasuries steadied, with the policy-sensitive two-year yield hovering at around 4.9 percent after sinking 15 basis points Tuesday. Yields on government bonds in Australia and New Zealand fell Wednesday.

“With markets ready to pounce on softer US data, any sign of weakness is likely to weigh further on yields and the US dollar,” said Matthew Simpson, a senior market analyst at City Index. “That could be great for equity market sentiment.”

Nearly 90 percent of the S&P 500 companies rose as the gauge closed just shy of 4,500. A rally in megacaps like Tesla Inc. and Nvidia Corp. sent the Nasdaq 100 up more than two percent.

A gauge of dollar strength rose and major currencies weakened against the greenback.

The crypto space changed course and erased earlier gains. Bitcoin had jumped more than six percent in the previous session as a US court ruling potentially paved the way for the country’s first Bitcoin exchange-traded fund.

In commodities, West Texas Intermediate rose for a fifth day, set to match the winning streak last seen in March, on signs of tighter market. Gold steadied after rising to the highest since early August on easing Fed rate hike bets.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks subdued after Powell testimony fails to surprise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares made a tentative start to Thursday after Federal Reserve chair Jerome Powell stuck to his recent hawkish tone as investors assess the future rate policy path from the Fed.

MSCI’s broadest index of Asia-Pacific shares outside Japan was marginally lower at 522.93. The index is down over 2% for the week and set to snap its three week winning run.

Australia’s S&P/ASX 200 index lost 1.17%, while Japan’s Nikkei eased 0.25%. China and Hong Kong stock markets are closed for a holiday.

Last week, the Fed held its benchmark interest rate steady at level between 5% and 5.25%, but officials projected rates will have to increase another half percentage point by year’s end to tame inflation.

Markets though remain unconvinced, pricing in a 25 basis point hike next month, according to CME FedWatch tool, and no more after that.

Powell in his remarks to lawmakers in Washington said the outlook for two further 25 basis point rate increases are “a pretty good guess” of where the central bank is heading if the economy continues in its current direction.

While his remarks were eagerly awaited by investors, they offered no real surprise.

Kevin Cummins, chief economist at NatWest Markets, said Powell’s testimony didn’t shed any new light on the Fed’s thinking or the likely future path for monetary policy, adding that his tone was very similar to last week’s press conference and mostly leaned hawkish.

“It’s clear that the FOMC wants the market to understand that a hike will be on the table for debate at the next meeting. The Fed’s data-dependent approach in this tightening cycle suggests upcoming data releases could shift expectations.”

Atlanta Federal Reserve President Raphael Bostic said on Wednesday the Fed should not raise rates further or it would risk “needlessly” sapping the strength of the U.S. economy.

The comments highlight the growing debate at the central bank over when and if the central bank should hike further.

Investor attention will be on Bank of England later in the day, with a hike widely expected and the only contention is how big the raise will be after inflation data came in hotter than expected on Wednesday.

Economists polled by Reuters last week were unanimous that the BoE would raise rates to 4.75%, their highest since 2008, from 4.5% but the inflation data pushed financial markets to price in a nearly 50% chance that the BoE would opt for a bigger move and raise rates by half a percentage point.

“Where other central banks’ concern is now slower-than-hoped easing, the UK is still seeing acceleration,” said Taylor Nugent, an economist at National Australia Bank, referring to runaway UK inflation, which held at 8.7% in May.

“The BoE’s conditional guidance put the burden of proof on the data showing more persistent inflation pressures to continue hiking bank rate. Combined with wages data last week, they have got that in spades.”

Sterling was last at $1.2769, up 0.01% on the day, hovering close to a one-year high of $1.2849 hit last week.

The euro was up 0.06% to $1.0991, having touched a one-month high of $1.09925 earlier in the session. The Japanese yen strengthened 0.11% to 141.70 per dollar.

Markets will also be awaiting policy decision from Turkey’s central bank, with a policy pivot and a sharp rate increase widely expected.

The Turkish lira has skidded to record lows since last month’s election and last fetched 23.56 per dollar.

U.S. crude fell 0.07% to $72.48 per barrel and Brent was at $77.06, down 0.08% on the day. [O/R]

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks rise, Japan’s Topix index set for three-decade high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian equities advanced, led by Japanese shares and tech stocks, with traders looking for clues of any breakthrough in negotiations in Washington to avert a US default.

An Asian equity gauge rose for a second day with Japan’s Topix index climbing 0.5 percent at the open, heading for the highest close since 1990.

Hong Kong stocks jumped more than 1 percent following a 4 percent gain in the Nasdaq Golden Dragon China Index on Monday when filings showed money manager Michael Burry boosted his bullish bets on e-commerce giants JD.com Inc. and Alibaba Group Holding Ltd. China is slated to publish a range of economic data including industrial production and retail sales.

Solid fundamentals and expectations for structural changes “justify a bullish stance” on Japan’s equities, Goldman Sachs Group Inc. said.

A still dovish bias by the Bank of Japan is also positive for Japanese equities and “earnings have been increasing relative to other jurisdictions,” said Chris Weston, head of research at Pepperstone Group Ltd. “There’s a lot working for it at the moment from a technical and fundamental perspective,” he said on Bloomberg Television. “We still like the case that’s going on in Japan right now.”

South Korean equities also rallied, supported by chip stocks on the potential merge between Kioxia Holdings Corp. and Western Digital Corp. Australian stocks declined.

Also Read: Oil edges higher with US seeking crude for strategic reserves

US equity futures edged lower before a meeting between President Joe Biden and House Speaker Kevin McCarthy Tuesday. The US stock market gained Monday amid mixed signals sent by both factions in the debt-ceiling talks. Treasury Secretary Janet Yellen reiterated her department may run out of cash as soon as June 1 unless Congress raises or suspends the federal debt limit.

The dollar and Treasuries were both little changed in early trading in Asia, while Australian and New Zealand bonds opened lower. The Aussie was flat following Reserve Bank of Australia minutes that showed officials weighed the risk of upside surprises to inflation amid a tight labor market in their surprise decision to hike rates this month.

Investors are monitoring signs the move by China’s central bank to inject more long-term liquidity into the financial system for the sixth month may finally deliver a post-pandemic boost to economic growth.

More Volatility

UBS Private Wealth Management expects to see more volatility in the markets, especially on the short-end of the Treasury curve, as deadline approaches on the debt-ceiling dispute. “If you’re someone who has cash on the sideline, right now we are recommending that you go ahead and you lock in those improved bond yields,” financial adviser Sarah Ponczek said on Bloomberg Television.

Meanwhile, data showed New York manufacturing slid the most since April 2020. This week’s figures will likely underscore more economic weakness, emboldening the Federal Reserve’s dovish voices even though inflation has failed to reassure, according to Anna Wong at Bloomberg Economics.

JPMorgan Chase & Co.’s Marko Kolanovic joined a chorus of Wall Street strategists Monday in warning that the US debt-ceiling impasse is yet another headwind threatening the outlook for equity markets. Morgan Stanley’s Mike Wilson delivered a similar warning on the debt-ceiling deadline, noting the bank’s clients said the issue is unlikely to be resolved without some near-term volatility.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks braced for China data, US Fed speakers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks started cautiously on Monday as investors braced for a China policy rate decision and economic data this week, while awaiting a host of US Federal Reserve officials to speak to vindicate market pricing of rate cuts this year.

Early action was sluggish following a report on Friday showed US consumer sentiment slumped to a six-month low in May and long-term inflation expectations jumped to the highest since 2011, boosting the US dollar and Treasury yields.

In emerging markets, the Turkish lira touched a fresh two month low of 19.70 to the dollar as the country appeared headed for a runoff presidential election. The Thai Baht was 0.7 percent stronger after the opposition secured a stunning election win on Sunday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.16 percent lower, while Japan’s Nikkei bucked the trend with a gain of 0.5 percent, building on the optimism from last week during the earnings season.

S&P 500 futures slipped 0.2 percent, while Nasdaq futures fell 0.3 percent.

Also Read: Trade Setup for May 15: Nifty 50 remains in snooze mode and in a key resistance zone

Investors are keenly awaiting China’s central bank rate decision on Monday. Market watchers polled by Reuters expect the medium-term policy rate to be left unchanged despite disappointing data last week that fuelled concerns about a global slowdown.

The country is due to report monthly industrial production, retail sales and fixed asset investment data on Tuesday.

“A big year-on-year improvement shouldn’t surprise given it is measured against a stagnant economy that was in lockdown,” said Chris Weston, head of research at Pepperstone.

“However, with China’s data throwing up a few concerns of late – we’ve seen poor import, PPI, and loan data – China’s growth is very much at the heart of market moves,” said Weston.

Also this week, a host of Federal Reserve officials are speaking, with Chair Jerome Powell set for Friday, and could generate plenty of headlines to move the dial further.

Fed Governor Michelle Bowman said on Friday that the U.S. central bank probably will need to raise interest rates further if inflation stays high.

Markets are still seeing this is the peak for Fed funds rates and pricing in 70 basis points in cuts by the end of this year, after the CPI and PPI data last week supported the case of Fed pausing given the slowing inflation.

Joseph Capurso, head of International Economics at Commonwealth Bank of Australia, believes the persistence of U.S. inflation would take out the pricing for near term cuts to the Funds rate, and contribute to a recovery in the dollar in coming months.

The U.S. dollar index was hovering at 102.72 early on Monday against a basket of major currencies, after surging 1.4 percent last week on global growth concerns, the biggest weekly gain since September.

Very much on investors’ mind was the uncertainty about lifting the US debt ceiling and the return of bank worries. US President Joe Biden expects to meet with Congressional leaders on Tuesday for talks to raise the nation’s debt limit and avoid a catastrophic default.

Concerns about U.S. Congress not raising the debt ceiling on time have created large distortions in the short-end of the yield curve as investors avoid bills that come due when the Treasury is at risk of running out of funds, and pour into alternative issues.

The yield on benchmark 10-year notes was little changed at 3.4700 percent, after rising 6 basis points on Friday, and two-year yields were flat at 3.9914, having also jumped 10 basis points in during the previous session.

Oil prices were trying to find a footing after tumbling nearly 2 percent last week on demand concerns. U.S. crude futures were flat at 70.03 per barrel, while Brent crude down 0.1 percent  to $74.13 per barrel.

Gold prices were 0.1 percent lower at $2,009.49 per ounce.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks are mixed as traders await China data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stocks in Asia were mixed in early trading as investors awaited trade data from China that will provide further signs on the country’s economic recovery.
Shares gained in Japan, while they fell in South Korea and Australia. Contracts for Hong Kong pointed to a lower open.

Futures for the S&P 500 and Nasdaq 100 both edged lower in Asia. The S&P 500 ended Monday fractionally higher after jumping 1.9 percent Friday. The tech-heavy Nasdaq 100 gained 0.3 percent as AI-capable chipmakers Advanced Micro Devices Inc. and Nvidia Corp. rose alongside Google-parent Alphabet Inc.

China is forecast to report a second month of export growth in April as global demand rebounds. The world’s second-largest economy surprised markets when its exports exceeded estimates in March.

The dollar crept higher in early Asian trading, heading for a second day of gains. The greenback reversed earlier losses on Monday after the Federal Reserve’s Senior Loan Officer Opinion Survey signaled the credit market was tightening slightly, while business loan demand was weakening. Australian and New Zealand bond yields opened higher on Tuesday.

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Treasuries were little changed in early Asian trade after falling Monday as investors considered what it would take to finally reverse the Fed’s path on rates. Bond trading desks are bracing for as much as $35 billion of corporate debt sales this week, while Apple Inc. kicked off a $5.25 billion sale.

Investors will be watching US President Joe Biden and congressional leaders as they are set to discuss the debt-ceiling issue. Meanwhile, consumer-inflation data Wednesday may provide further clues on the Fed’s path and set the tone for equities.

Attention in Asia will turn to Australia, where the government is set to announce its first budget surplus since 2008. Windfall tax revenue from high employment and elevated commodity export prices combine to swell the government’s coffers.

Elsewhere in markets, oil edged lower as investors assessed a complex outlook for global demand after a period of volatile trading. Gold was little changed and Bitcoin held below $28,000.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks rise after US financials rebound

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares advanced Monday after a chaotic week for financial markets ended Friday with a rally in risk assets.

Stocks moved firmly higher in South Korea and Australia while Japan’s benchmark Topix index fluctuated as traders there returned from national holidays. Equity futures pointed to gains of less than 1 percent in Hong Kong.

A gauge of Australia’s financial shares rose more than 1 percent, led by Westpac Banking Corp.’s gain of about 2.5 percent after the lender reported first-half net profit that was slightly ahead of analyst estimates.

Contracts for US equities fell in early Asian trading hours after the strong performance on Wall Street Friday. The S&P 500 halted its longest losing streak since February and climbed 1.9 percent as US regional banks rebounded. The KBW Bank Index of financial heavyweights rebounded from its lowest since September 2020.

The Nasdaq 100 rose 2.1 percent, with strong earnings at Apple Inc. helping lift the megacap tech space as the world’s most-valuable company climbed almost 5 percent.

Also Read: Trade Setup for May 8: Nifty 50 looks to form new base after Friday’s correction

Most major currencies were little changed in early trading on Monday after a gauge of dollar strength ended last week down 0.6%. The greenback advanced 0.2% versus the yen.

Treasury yields climbed, with yields also rising in Australia and New Zealand.

US jobs data last week showed hiring and worker pay gains accelerated in April in signs of labor-market resilience and inflationary pressures in the face of headwinds. The solid data has tempered fears of a US recession, improving sentiment that saw Treasuries fall and Wall Street’s favorite volatility gauge, the VIX, snap a four-day surge.

The strong figures also increase chances the Federal Reserve will hold rates higher for longer and potentially keep the door open to an 11th straight hike in June.

Rates on swap contracts linked to Fed meetings — which on Thursday briefly priced in a cut in July — moved higher, to levels consistent with a stable policy rate until September — followed by at least two quarter-point cuts by year-end.

Worries Remain

Despite Friday’s stock rebound, investors still have much to worry about. The rout in US bank shares has the S&P 500 financials index on the verge of falling back below its 2007 peak.

“More demand destruction has to happen, more breakage will be a consequence of it,” George Boubouras, head of research at K2 Asset Management, said of the Fed’s monetary policy impact on Bloomberg Radio. “The market will have a conniption and volatility spike for a few days here and there.”

Meanwhile, Treasury Secretary Janet Yellen sees “simply no good options” for solving the debt limit stalemate in Washington without Congress lifting the cap. She even cautioned that resorting to the 14th Amendment would provoke a constitutional crisis.

Investors will be awaiting the release this week of the core consumer price index, which excludes food and energy and is closely watched by the Fed. It is projected to show a 5.5 percent increase in April from a year ago.

In Asia, attention will swing to China’s trade figures due in the first half of the week and inflation numbers set for release on Thursday.

Elsewhere in markets, oil opened with a gain as investors assessed a complex outlook for global demand after a period of volatile trading. Gold was little changed.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks fall as bank woes hit US shares

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares in Asia fell after Wall Street dropped on renewed concern about the banking sector before a Federal Reserve decision Wednesday where policymakers are expected to raise interest rates.

Shares declined in South Korea and Australia at the open, while markets in Japan and mainland China are closed for holidays. There’s no trading of cash Treasuries in Asia hours due to the holiday in Japan.

US equity futures steadied in the early Asian trade after the S&P 500 slipped 1.2 percent Tuesday with the financial sector the worst performer after energy. US regional lenders PacWest Bancorp and Western Alliance Bancorp both slid at least 15 percent, just a day after JPMorgan Chase & Co.’s acquisition of First Republic Bank seemed to bolster confidence in the sector.

The decline in energy stocks followed a 5.3 percent drop for the US oil price, the biggest decline since July, in a sign of unease about global growth. The decline stabilized early Wednesday.

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The Bloomberg dollar index was little changed. Australian government bonds rose and New Zealand’s debt edged higher, following a rally in Treasuries Tuesday. The US two-year note yield had slid 18 basis points to below 4 percent, and the 10-year yield dropped 14 basis points to 3.42 percent.

US economic data showed a cooling in the labor market, with the number of job openings in March dropping to the lowest level in two years. The decline in available positions comes before the Fed’s rate decision where it is forecast to raise borrowing costs 25 basis points. Market pricing indicates the increase will mark the peak of the tightening cycle before weaker growth prompts the central bank to cut rates later in the year.

‘Tightening Bias’

“Should the Fed offer any sort of tightening bias in its outlook – and overlook the financial stability risk – then the skew is very much in favor of a hawkish reaction,” Chris Weston, head of research at Pepperstone Group Ltd in Melbourne, wrote in a note. “We initially see US bond yields and the US dollar higher, with gold sellers in the mix.”

The lack of clarity regarding the US debt ceiling issue also added to the uncertain mood. Between now and June 1 — the date by which the Treasury Department could run out of sufficient cash — President Joe Biden and members of the House and Senate are scheduled to be in town at the same time for the sum total of one week to find a solution.

Advanced Micro Devices Inc., Ford Motor Co., and Starbucks Corp. all fell in after-hours trading after the companies reported earnings. AMD shares dropped 3.7 percent after it announced a lackluster sales forecast. Starbucks slipped 5.6 percent in late trading after it reaffirmed its guidance for the full fiscal year, a cautious move that appeared to disappoint Wall Street.

In commodities, oil steadied in Asia after tumbling more than 5% on Tuesday and gold was little changed.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks set to gain after tech-led US rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian equity markets were poised to rise on Friday after solid earnings from technology companies led to gains on Wall Street, offsetting the impact of a report showing slowing US economic growth and higher-than-forecast inflation that caused Treasuries to dip.

Futures for benchmarks in Hong Kong, Japan and Australia all pointed to advances, with the latter two poised to notch monthly gains. The S&P 500 on Thursday jumped 2 percent, the most since January, and the tech-heavy Nasdaq 100 rose 2.8 percent as a surge in advertising revenue helped Meta Platforms Inc. beat analyst estimates for profit, pushing the company’s shares 10% higher. Amazon Inc. shares, however, fell in post-market trading.

Treasuries fell, with the policy-sensitive two-year yield trading at 4.07 percent, as the unexpectedly high inflation data could prompt the Federal Reserve to keep interest rates higher for longer. The US central bank is expected to raise rates by a quarter percentage point at its meeting next week.

Meanwhile, the Bank of Japan is expected to leave overall monetary stimulus unchanged in its first policy decision under new governor Kazuo Ueda, with investors focused on what might be his opening changes after the BOJ’s first leadership transition in a decade.

Futures for the Nasdaq 100 were little changed in early trading Friday. Intel Corp. was higher in post-market trading after releasing results. Hasbro Inc. was the latest consumer company to top earnings estimates after the likes of Coca-Cola Co. and Procter & Gamble Co., boosting confidence corporate America is coping relatively well with price pressures and policy tightening.

Also Read: Trade Setup for April 28: All eyes on 18,000 after Nifty 50 has best F&O series in six months

“Coming into this week, the biggest concern investors had was that any or all of the mega-cap tech were likely to disappoint — the setup was difficult because they had all run up into earnings,” Art Hogan, chief market strategist at B. Riley Wealth Management, said in an interview. “Yet there’s a ubiquitous feeling large-cap tech did a great job managing their businesses — it’s a sigh of relief the market is breathing.”

Amazon dropped post-market, erasing a gain of as much as 12 percent after jolting investors by revealing that revenue growth in the cloud-computing division slowed so far in April. Other cloud stocks then echoed those declines.

Dana Peterson, chief economist at The Conference Board, said the latest batch of economic data — including a slowdown in US jobless claims — showed the kind of cognitive dissonance investors have been grappling with as “typically when you have recessions, the labor market collapses with GDP, and we’re not seeing that.”

“We’re probably going to dip into a recession, maybe starting right now in the second quarter, but we really need to see data,” she said. “Our leading indicators index suggests that it’s starting to happen now, and consumers and CEOs have been anticipating recession for some time.”

Elsewhere, oil was little changed after wiping out all the gains from OPEC+’s surprise production cut at the beginning of the month, with West Texas Intermediate crude headed for its sixth month of declines, the longest such streak since January 2015. The dollar and gold were little changed while Bitcoin slipped after edging back toward the key $30,000 level.

Also Read: Meta’s Megamorphosis: How a stock that fell 65% in 2022 recovered 150% in 6 months

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks, US Futures gain in cautious trading

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks and US stock futures opened marginally higher in a cautious start to trading Monday after Treasury yields surged last week on rate-hike bets and shares on Wall Street ended lower Friday.

Shares rose in Japan and Australia, while contracts for Hong Kong equities pointed to declines. As worries about the banking sector abate and inflation pressure persists in the US, investors have upped wagers for at least one more interest rate increase from Federal Reserve this year, which is rippling through global markets.

The S&P 500 futures rose 0.2 percent after the index 0.2 percent by the same amount on Friday, trimming its gain for the week to 0.8 percent. Nasdaq 100 futures were little changed after the gauge squeezed out a 0.1 percent gain last week as policy-sensitive technology names like Microsoft Inc. and Apple Inc. dragged on the benchmark. Swaps traders upped bets for a rate increase by June and pricing suggests a quarter point hike has better than three-in-four odds for May.

The dollar traded within ranges of about 0.1 percent versus major peers early Monday after a gauge of greenback strength rose 0.4 percent last week.

Treasury yields continued their climb, with the rate-sensitive two-year advancing to around 4.12 percent Monday. It was driven higher last week by a measure of March retail sales showing core readings declined less than estimated and comments from Fed officials. Yields on government bonds in Australia and New Zealand climbed in early trading.

Looking ahead to this week, investors are awaiting the release of the Fed’s Beige Book and commentary from officials including John Williams, Raphael Bostic, Loretta Mester and Lisa Cook. Markets were rattled last week after Fed Governor Christopher Waller said he favored more policy tightening in the central bank’s battle with inflation.

“I don’t think all of the rate hikes have worked their way through the system and it looks as though the Fed is going to continue to tighten,” said Frances Stacy, director of strategy at Optimal Capital Advisors. “I don’t think we’re completely out of the woods yet, but that doesn’t mean that the risk is going to happen overnight, but when something does hit, markets can gap down pretty dramatically.”

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Much of the focus in Asia will be on China and the strength of its economic recovery. Figures on Tuesday are projected to show gross domestic product expanded 3.9 percent in the first quarter from a year earlier, well below the government’s target for full-year growth of around 5 percent. March data may show increases in industrial output, investment and retail sales.

In Japan, shares of security companies rose after Prime Minister Fumio Kishida was targeted by an explosive device at an event he attended in central Japan, weeks before he hosts the world leaders for a G-7 summit. There was little discernible impact on wider Japanese markets.

Financials outperformed last week with JPMorgan Chase & Co. and Citigroup Inc. leading the charge after earnings and the sector will remain in the hot seat Monday when Charles Schwab Corp. and State Street Corp. report.

Investors will be looking for signs of health from Schwab, which has plunged nearly 40 percent this year as rising rates drove a spike in unrealized losses at the brokerage. Bank of America Corp. and Goldman Sachs Group Inc. will report later in the week as will Netflix Inc. and Tesla Inc.

While recent data suggested runaway prices were moderating somewhat, a Friday report suggested Americans are pessimistic. Inflation expectations jumped in April with consumers seeing prices climbing 4.6% on an annual basis, up from 3.6 percent in March, according to a University of Michigan survey.

In commodities, crude was little changed Monday after logging its fourth week of gains amid signs of a tightening global market. Gold was steady after a small decline last week and Bitcoin held above the key $30,000 level.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow