Stocks in Asia rebounded after the S&P 500 closed above a key technical level and the UK reversed more of its unfunded tax cuts, bolstering global market sentiment.
(Bloomberg) — Stocks in Asia rebounded after the S&P 500 closed above a key technical level and the UK reversed more of its unfunded tax cuts, bolstering global market sentiment.
A gauge of the region’s equities rose, led by technology stocks in Hong Kong.
Shares of Chinese electric-vehicle maker BYD Co. jumped more than 6% on an expected surge in third-quarter profit, putting other vehicle makers in the country in focus.
The Japanese yen paused in its run toward the closely watched 150 per dollar level, which has investors on high alert for possible intervention.
Finance Minister Shunichi Suzuki said he was watching market moves with a sense of urgency.
A Bloomberg gauge of the dollar declined for a second day as most major currencies clawed back some of their recent losses.
Treasury yields edged lower.
Chinese junk dollar bonds dropped to a record low, as a property crisis sparked by a crackdown on excessive borrowing and a slide in home sales show few signs of turning around without more policy steps.
China’s decision to delay the publication of key economic data including third-quarter gross domestic product may inject a note of caution to trading in the region.
The Communist Party congress provided few signs of a let up in China’s Covid-zero and property-market policies that are weighing on the economy.
Government bond yields in New Zealand jumped after inflation remained stronger than expected, underscoring risks to markets from persistently high consumer prices even in countries at the vanguard in tightening monetary policy.
The latest US recession probability models by Bloomberg economists Anna Wong and Eliza Winger forecast a higher probability of such an event across all time frames — with the 12-month estimate of a downturn by October 2023 hitting 100%.
That’s up from 65% for the comparable period in the previous update.
Amid debate about when stocks might find a bottom, Morgan Stanley’s Mike Wilson wrote that the rout which took the S&P 500 to test a “serious floor of support” could lead to a technical recovery.
The strategist, who’s one of Wall Street’s most-prominent bearish voices, said he “would not rule out” the measure rising to about 4,150. That’s 13% above current levels.
Still, Wells Fargo Investment Institute expects to see further challenges to company profits.
“Our earnings estimates have been below the consensus for quite some time,” global strategist Gary Schlossberg said on Bloomberg Television. “We think that there’s still some further downward revisions to come.”
Elsewhere in markets, oil rose after Monday’s choppy session as investors weighed signs of a tight market against concerns over a global economic slowdown.
Gold was steady and Bitcoin continued to traded below $20,000.
Key events this week:
- US industrial production, NAHB housing market index, Tuesday
- Fed’s Neel Kashkari speaks, Tuesday
- Euro area CPI, Wednesday
- EIA crude oil inventory report, Wednesday
- US MBA mortgage applications, building permits, housing starts, Fed Beige Book, Wednesday
- Fed’s Neel Kashkari, Charles Evans, James Bullard speak, Wednesday
- US existing home sales, initial jobless claims, Conference Board leading index, Thursday
- Euro area consumer confidence, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 futures rose 0.7% as of 10:51 a.m.
Tokyo time. The S&P 500 rose 2.7% Monday
- The Nasdaq 100 futures added 0.7%. The Nasdaq 100 rose 3.5%
- Japan’s Topix index gained 0.6%
- South Korea’s Kospi index surged 0.5%
- Hong Kong’s Hang Seng Index was up 1.1%
- China’s Shanghai Composite Index increased 0.2%
- The S&P/ASX 200 Index climbed 1.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $0.9833
- The Japanese yen rose 0.2% to 148.80 per dollar
- The offshore yuan was little changed at 7.2054 per dollar
- The British pound fell 0.2% to $1.1340
Cryptocurrencies
- Bitcoin was little changed at $19,529.58
- Ether rose 0.2% to $1,332.17
Bonds
- The yield on 10-year Treasuries fell two basis points to 3.99%
- Australia’s 10-year bond yield dropped five basis points to 3.97%
Commodities
- West Texas Intermediate crude rose 0.3% to $85.70 a barrel
- Spot gold was little changed
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