Asian equities looked poised for a mixed open Friday as big tech stocks on Wall Street rallied in late trading following solid earnings. US share futures advanced.
Contracts on the Nasdaq 100 gained in the Asian session after the underlying benchmark fell 1.9% on Thursday. Amazon.com Inc. and Intel Corp. both gained in after-trading hours after the tech-heavy index hit its lowest since May. The gains in US futures point to an early rebound when trading begins on Wall Street after the S&P 500 came to the brink of closing in correction territory.
In Asia, Australian shares edged higher. Futures in Hong Kong rose, while those in Japan slipped. The Golden Dragon index, which tracks the largest Chinese firms listed in the US, advanced 0.5% on Thursday.
“Earnings season has left much to be desired as typically economically sensitive stocks, that have held up well against a difficult backdrop, begin to creak under the pressure,” said Geir Lode, head of global equities at Federated Hermes Ltd. “Good results are no longer enough for these economically sensitive stocks to gain traction as investors are concerned about a weaker macroeconomic backdrop.”
Elsewhere, Treasury yields fell following a solid seven-year bond auction and a rise in continuing jobless claims, an indication the US labor market is starting to crack despite still strong economic growth. Traders are now awaiting the PCE deflator print on Friday to solidify bets the Federal Reserve will pause next week.
Still, swaps contracts project a roughly one in three chance of another Fed hike in the current tightening cycle, according to Bloomberg data.
Traders also kept a close eye on geopolitical developments, with Israel’s military saying it killed Hamas’s deputy head of intelligence, who it said was responsible for helping plan the Oct. 7 attacks. The army overnight also made a limited ground raid into northern Gaza while Iran escallated its rhetoric with the US. Oil dropped below $84 a barrel while gold remained above $1,980 an ounce.
In currencies, the dollar gave up earlier gains as Treasury yields fell, while the yen was steady ahead of Tokyo inflation data, an indicator of Japanese consumer cost pressures. The euro pared a loss after the European Central Bank kept rates unchanged as expected.
“With a rapidly deteriorating macroeconomic landscape, as shown by October PMIs, in our view the ECB will have to tread very carefully going into 2024 and will have no choice but to lower interest rates,” said Julien Lafargue, chief strategist at Barclays Private Bank.
Key events this week:
- China industrial profits, Friday
- Japan Tokyo CPI, Friday
- US PCE deflator, personal spending and income, University of Michigan consumer sentiment, Friday
- Exxon Mobil earnings, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 8:15 a.m. Tokyo time. The S&P 500 index fell 1.4%
- Nasdaq 100 futures rose 0.8%. The Nasdaq 100 index fell 2.5%
- Hang Seng futures rose 0.6%
- Australia’s S&P/ASX 200 rose 0.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0564
- The Japanese yen was little changed at 150.37 per dollar
- The offshore yuan was little changed at 7.3209 per dollar
- The Australian dollar rose 0.1% to $0.6329
Cryptocurrencies
- Bitcoin rose 0.2% to $34,256.2
- Ether rose 0.6% to $1,808.99
Bonds
- Australia’s 10-year yield declined seven basis points to 4.80%
Commodities
- West Texas Intermediate crude rose 0.4% to $83.56 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.