(Bloomberg) — Following a mixed bag of earnings reports from major tech companies on Wall Street, most stocks in Asia are poised for a tentative opening. Traders are also bracing for the important upcoming U.S. elections and a significant decision from the Federal Reserve regarding interest rates.
Futures pointed towards a continuation of gains for the third consecutive day in Tokyo, while Hong Kong’s market is expected to experience a slight decline, and Sydney is projected to remain stable. Early trading indicated a modest uptick in U.S. contracts after the S&P 500 posted a slight gain and the Nasdaq Composite reached an all-time high.
Alphabet Inc. saw a notable surge of over 4% in after-hours trading after reporting earnings that exceeded analyst expectations. In contrast, Advanced Micro Devices Inc. experienced a downturn due to a lackluster revenue forecast. The tech sector, boasting a combined market capitalization exceeding $12 trillion, is preparing to unveil their quarterly results between Tuesday and Thursday this week.
“Investors will need to see bigger revenue and earnings surprises for the group to outperform,” stated Chris Senyek from Wolfe Research. “A strong earnings season could once again set the stage for the tech sector to outperform as the year comes to a close.”
The U.S. dollar gained strength on Tuesday, with gold and bitcoin trading near their historic peaks as markets gear up for the pivotal U.S. elections taking place next week. Oil prices continued to decline after suffering their most significant drop in more than two years on Monday, as worries about the Middle Eastern conflict’s impact on oil supply eased. Early Wednesday trading showed a slight rebound in oil prices.
Data released just a week ahead of the Federal Reserve’s crucial decision revealed that U.S. job openings have dropped to levels not seen since early 2021. These figures contradict the strong employment report from September, which suggested a robust labor market, leading traders to scale back expectations of a significant interest rate cut. Meanwhile, another report indicated that consumer confidence has reached its highest level since the beginning of the year.
The S&P 500 experienced a modest rise of 0.2%, while the Nasdaq 100 recorded an increase of 1%. Conversely, the Dow Jones Industrial Average faced a decline of 0.4%. Treasury yields for 10-year notes dipped three basis points, settling at 4.25%.
In Asia, all eyes are on China after a Reuters report suggested that authorities are contemplating the approval of an ambitious 10 trillion yuan ($1.4 trillion) in additional borrowing over the coming years. This move aims to invigorate the economy and mitigate local government debt risks.
Key events this week:
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Eurozone consumer confidence, GDP, Wednesday
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US GDP, ADP employment, pending home sales, Wednesday
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Meta Platforms, Microsoft earnings, Wednesday
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US Treasury Department holds quarterly refunding announcement of bond-auction plans, Wednesday
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China Manufacturing and non-manufacturing PMI, Thursday
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Bank of Japan rate decision, Thursday
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Eurozone CPI, unemployment, Thursday
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US personal income, spending and PCE inflation data, initial jobless claims, Thursday
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Amazon, Apple earnings, Thursday
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China Caixin manufacturing PMI, Friday
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US employment, ISM manufacturing, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.2% as of 7.18 a.m. Tokyo time
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Nikkei 225 futures rose 0.6%
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S&P/ASX 200 futures were little changed
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Hang Seng futures fell 0.2%
Currencies
Cryptocurrencies
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Bitcoin was little changed at $72,350.01
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Ether rose 0.3% to $2,628.19
Bonds
Commodities
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West Texas Intermediate crude rose 0.3% to $67.41 a barrel
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Spot gold was little changed at $2,774.44 an ounce
This story was produced with the assistance of Bloomberg Automation.
