(Bloomberg) — Stocks were mixed in Asia and US equity futures climbed as traders assessed prospects for earnings growth against a backdrop of rising interest rates.
(Bloomberg) — Stocks were mixed in Asia and US equity futures climbed as traders assessed prospects for earnings growth against a backdrop of rising interest rates.
An Asia Pacific share gauge fluctuated, with stocks rising in Japan and South Korea but falling in Hong Kong.
US equity futures signaled further gains after several positive results Tuesday, including from Netflix Inc. which reported a surge in subscribers.
Treasury yields held near multi-year highs before the publication of US housing data for September and the Fed’s Beige Book.
The yield on the 10-year hit 4.02%.
The dollar was steady, while the pound rose against most Group-of-10 peers ahead of the first inflation data to print in wake of the UK government’s fiscal fiasco and as the nation backs a new Chancellor.
In Japan, the authorities continued their jawboning of the yen, with Finance Minister Shunichi Suzuki saying he is increasing the frequency of monitoring foreign-exchange markets.
The currency hovered at around 149 per dollar.
Read: Yen Traders on Intervention Alert as Japan Keeps Guard
Upbeat company results, cheaper valuations and UK policy reversals have helped buoy risk appetite.
The sentiment on stocks and global growth among fund managers surveyed by Bank of America Corp. shows full capitulation, opening the way for equities to bottom in the first half of 2023.
Despite the optimism, Terry Sandven, chief equity strategist at US Bank Wealth Management, warned that challenges remain.
“Analysts’ consensus earnings projections remain subject to downward revision,” he wrote in a note. “Inflationary trends, hawkish Fed commentary, and a slower earnings growth pace in 2023 are key contributors weighing on investor sentiment and equity prices.”
Some regional Fed directors last month favored raising a key interest rate by a smaller or larger amount than the 75 basis points that policy makers ultimately decided was needed to curb persistent inflation, according to minutes of discount-rate meetings released Tuesday.
Japanese authorities may not achieve much from their intervention in the yen, according to Sean Callow, senior currency strategist at Westpac Banking Corp.
“It’s more, I guess, just keeping the market honest as far as the speculative positioning, just hoping it doesn’t get too stretched, doesn’t become too much of a one-way bet,” Callow said on Bloomberg Television.
“But really it’s not likely to achieve much and I think most central banks in certainly G-7 and G-20 would prefer just to keep out.”
Read: Fed’s Bostic Says Slowing Inflation Best for Long-Run Employment
Oil climbed from a two-week low on concern that the European Union’s latest sanctions on Russian fuel could exacerbate the market tightness that the US is trying to alleviate with additional sales.
The Biden administration will announce Wednesday a plan to release 15 million barrels from US emergency oil reserves in an effort to ease high gasoline prices.
Elsewhere, gold was little changed and Bitcoin traded around $19,300.
Key events this week:
- 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
- S&P 500 futures rose 0.8% as of 11:54 a.m.
Tokyo time. The S&P 500 rose 1.1% Tuesday
- Nasdaq 100 futures rose 1.2%. The Nasdaq 100 rose 0.8%
- Japan’s Topix index was up 0.4%
- South Korea’s Kospi index rose 0.4%
- Hong Kong’s Hang Seng Index fell 0.9%
- China’s Shanghai Composite Index slipped 0.2%
- Australia’s S&P ASX 200 Index rose 0.4%
- Euro Stoxx 50 futures added 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was steady at $0.9852
- The Japanese yen was at 149.18 per dollar
- The offshore yuan was little changed at 7.2204 per dollar
- The British pound strengthened 0.1% to $1.1335
Cryptocurrencies
- Bitcoin fell 0.3% to $19,301.39
- Ether slipped 0.5% to $1,307.37
Bonds
- The yield on 10-year Treasuries climbed two basis points to 4.02%
- Australia’s 10-year yield advanced two basis points to 3.93%
Commodities
- West Texas Intermediate crude rose 1.4% to $84.02 a barrel
- Spot gold slid 0.1% to $1,650.16 an ounce
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