Global equities held an advance amid sharp swings in Chinese stocks while other key markets in Asia followed Wall Street higher following optimism from early US earnings reports.
(Bloomberg) — Global equities held an advance amid sharp swings in Chinese stocks while other key markets in Asia followed Wall Street higher following optimism from early US earnings reports.
Hong Kong and mainland shares swung in and out of positive territory Tuesday, with the biggest moves in the hard-hit technology sector. The rocky trading followed the worst day for the Hang Seng Index since the 2008 financial crisis on Monday as investors reacted to President Xi Jinping tightening his control of government.
An index of global equities rose fractionally after advancing over the past two days. Markets in Japan and Australia reflected gains in the US on Monday, while futures for the S&P 500 fluctuated during Asian trading.
The offshore yuan fell to the lowest level since trading began a dozen years ago, as Xi’s power grab raised concern that concentrated decision-making could weaken growth and destabilize geopolitics. The decline extended after China’s central bank set the official fixing rate for the currency at the lowest level in 14 years.
“We’re certainly staying away from the Chinese market right now because the political scene is not favorable,” Laila Pence, president of Pence Wealth Management, said in an interview on Bloomberg TV. “There’s a lot less risk in the US and just as much upside.”
A fifth of S&P 500 companies have now posted third-quarter earnings with more than half outperforming estimates. Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Apple Inc. report this week. The iPhone maker raised prices for its subscription music and TV services, citing higher input costs.
Manufacturing and services data for the US underwhelmed, indicating Federal Reserve rate hikes are beginning to slow activity. Fed officials have entered a blackout period ahead of the central bank’s meeting next week, where it’s expected to raise rates 75 basis points.
Higher rates buoyed third-quarter results from UBS Group AG, which beat profit expectations, and HSBC Holdings Plc, which reported on Tuesday.
Elsewhere in markets, a gauge of the dollar was little changed as traders considered whether the Federal Reserve may be approaching the end of its aggressive tightening campaign. Treasury 10-year yields fell back to about 4.20%, with yields also declining in Australia and New Zealand.
Oil steadied as traders assessed near-term supply tightness in the crude market and broad appetite for risk assets including commodities. Gold was also steady in Asia.
Key events this week:
- Earnings due this week include: Apple, Microsoft, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Alphabet, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Coca-Cola, HSBC, Intel, McDonald’s, Mercedes-Benz, Merck, Samsung Electronics, Shell, UBS, UPS, Vale, Visa, Volkswagen
- US Conference Board consumer confidence, Tuesday
- Bank of Canada rate decision, Wednesday
- ECB rate decision, Thursday
- US GDP, durable goods orders, initial jobless claims, Thursday
- Bank of Japan policy decision, Friday
- US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 were little changed as of 7:01 a.m. London time. The S&P 500 rose 1.2% Monday
- Nasdaq 100 futures were little changed. The Nasdaq 100 gained 1.1%
- The S&P/ASX 200 Index rose 0.3%
- The Topix Index rose 1.1%
- The Hang Seng Index rose 0.2%
- The Shanghai Composite Index rose 0.1%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at $0.9874
- The Japanese yen was little changed at 148.90 per dollar
- The offshore yuan fell 0.2% to 7.3402 per dollar
Cryptocurrencies
- Bitcoin fell 0.2% to $19,340.95
- Ether was little changed at $1,350.43
Bonds
- The yield on 10-year Treasuries declined four basis points to 4.20%
- Australia’s 10-year yield declined seven basis points to 4.08%
Commodities
- West Texas Intermediate crude rose 0.2% to $84.78 a barrel
- Spot gold was little changed
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