(Bloomberg) — Asian stock markets poised for early gains on Wednesday as a rally in tech stocks buoyed Wall Street and bets on a Federal Reserve rate cut stabilized. .
Most Read Articles on Bloomberg
Stock futures in Japan, Australia and Hong Kong rose across the board. A U.S.-listed Chinese stock index fell 6.9% overnight as concerns grew that the recent burst of stimulus was not enough to convince investors of a sustained rise in the country’s stock market. . Chinese stocks soared about 11% at the open on Tuesday after a week-long holiday, before losing nearly half of their gains.
In the U.S., the S&P 500 rose 1% and the tech-heavy Nasdaq 100 rose 1.6%. The chipmaker is one of the market leaders, with Nvidia extending its five-day gain to 14%. Stock futures were little changed early Wednesday.
U.S. Treasuries firmed up after selling for the past four sessions as last week’s U.S. jobs report weighed on expectations for interest rate cuts. The yield on the U.S. 10-year Treasury note fell 1 basis point to just over 4%, while front-end yields fell even more sharply as investors parsed comments from Fed officials.
Boston Fed President Susan Collins said interest rate cuts should be done carefully and based on data. Atlanta’s Rafael Bostic said the economy remains strong, but the threat to the labor market is increasing while inflation risks are decreasing. Governor Adriana Kugler said authorities should remain focused on bringing inflation to target with a “balanced approach” that avoids a slowdown in employment.
“U.S. economic data is not very strong and the Federal Reserve’s contribution to the global rate cutting cycle is likely to end,” said Mark Hefele of UBS Global Wealth Management. “Therefore, we maintain our belief that investors should take a position in lower interest rates.”
Oil prices regained some gains early Wednesday after falling more than 4% on Tuesday on concerns about slowing demand from China, as the Chinese government refrained from imposing another large stimulus package.
Rising U.S. stocks pushed benchmarks well closer to record highs as investors began preparing for upcoming corporate results.
The S&P 500 topped 5,750. Honeywell International Inc. liked its plan to separate its advanced materials division. Roblox Inc. fell after Hindenburg Research said it was betting on the gaming platform.
the story continues
guessing game
Mohamed El-Erian says the guessing game being played over the direction of the Fed’s monetary policy is creating market volatility.
“Markets are all over the place. In the last 15 days, the probability of a 50bp rate cut in November has gone from over 60% to zero. Next month is November,” El-Erian, president of Queen’s College, University of Cambridge, told Bloomberg on Tuesday. told the TV.
“That’s how much uncertainty there was in this market. These are massive moves based on data points,” he added.
Billionaire investor Ray Dalio says he doesn’t expect the Fed to cut interest rates “significantly” and that bonds are a risky investment given recent volatility in the U.S. Treasury market. Ta.
“Treasury bonds are not a great investment,” the Bridgewater Associates founder said Tuesday at the Greenwich Economic Forum. “There is interest rate risk in the bond market.”
Michael Landsberg of Landsberg Bennett Private Wealth Management said yields are rising after a healthy decline, which means the bond market is currently pricing in lower rates and more cuts. It is said that this shows that it has not been factored in.
“Yields are likely to remain range-bound, and even if they rise from here, there is plenty of room for them to rise before higher yields start having a negative impact on stock prices,” he said.
This week’s main events:
Fed Minutes, Wednesday
Fed’s Rory Logan, Rafael Bostic, Austan Goolsby and Mary Daly speak Wednesday
US CPI, new unemployment insurance claims, Thursday
Fed’s John Williams and Thomas Barkin speak on Thursday
JPMorgan and Wells Fargo kick off earnings season for big Wall Street banks on Friday.
US PPI, University of Michigan Consumer Sentiment, Friday
Fed’s Laurie Logan, Austan Goolsby and Michelle Bowman speak on Friday
The main movements in the market are:
stock
Nikkei 225 futures were up 1.2% as of 7:22 a.m. Tokyo time.
Hang Seng futures rose 0.9%.
S&P/ASX 200 futures rose 0.2%
S&P500 futures little changed
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0979.
The Japanese yen remained almost unchanged at 148.23 yen to the dollar.
The offshore yuan was little changed at 7.0710 yuan to the dollar.
cryptocurrency
Bitcoin fell 0.1% to $62,280.04.
Ether rose 0.3% to $2,449.67
bond
merchandise
Spot gold was unchanged at $2,621.83 an ounce.
West Texas Intermediate crude rose 0.5% to $73.94 per barrel.
This article was produced in partnership with Bloomberg Automation.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
