(Bloomberg) — Asian stocks rose as traders braced for key economic data that could set the stage for the U.S. presidential election and the next Federal Reserve decision.
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While Chinese stock prices fluctuated, stocks in Hong Kong, Tokyo and Australia rose. U.S. futures were firm as most major groups in the S&P 500 rose at the start of the week, when corporate earnings were at their peak. Government bond yields have fallen.
Markets are bracing for Donald Trump’s possible return to the White House, with most major polls showing him in a tight race against Vice President Kamala Harris. Cryptocurrency companies soared as the former president is seen as endorsing digital tokens, with Bitcoin surpassing $70,000 for the first time since June.
A Trump victory would be more favorable for stocks and Bitcoin than his Democratic opponent, while a Harris presidency would ease housing costs slightly, according to a Bloomberg Markets Live Pulse poll. Probably. About 38% of respondents expect stock prices to accelerate in a year’s time under Republican candidates, compared with 13% under Democrats.
Philip Uhl, head of portfolio management at Rayliant Global Advisors, said a Trump victory is becoming more likely and “this is seen as good for U.S. stocks in the short term.” “Deficits widen, inflation picks up, and the Fed could delay rate cuts. All of this will put upward pressure on the dollar and be a headwind for other economies across Asia.”
It’s shaping up to be a busy week for investors as the countdown to the U.S. presidential election begins, with corporate earnings and economic data also expected to dictate the near-term direction of the market. Days before the Fed meets to consider the appropriate tempo of rate cuts, the data will show the underlying resilience of the U.S. economy and a temporary slump in job growth.
Investors are awaiting results from companies that account for nearly 42% of the S&P 500’s market capitalization, including big tech companies like Apple, Microsoft and Metaplatforms.
“Short-term focus has shifted to mega-cap returns, starting today with Google (Alphabet),” said Charu Chanana, chief investment strategist at Saxo Markets. “There remains an expectation that spending on AI will be sustained, which could continue to be a key driver of overall stock market momentum.”
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In currency markets, the yen strengthened after Prime Minister Shigeru Ishiba promised to restore political stability in an effort to maintain power after his ruling party failed to win a majority in the House of Representatives.
Traders are also awaiting the Bank of Japan’s policy decision, expected later this week. Japan’s labor market tightened in September, data showed, with continued pressure on companies to raise wages ahead of the Bank of Japan meeting.
Although the dollar was firm, the yield on 10-year U.S. Treasuries fell after rising earlier on weak demand for government bond auctions.
Meanwhile, the Biden administration has finalized restrictions on investments by U.S. individuals and companies in advanced Chinese technologies such as semiconductors, quantum computing, and artificial intelligence.
Separately, investors pulled money out of exchange-traded funds (ETFs) that buy Chinese stocks last week, leading to continuous inflows as the latest economic stimulus package failed to impress investors. The data revealed that the situation had come to a halt.
In corporate news, Nippon Paint Holdings’ stock price soared 24% in early Tokyo trading, the largest intraday increase in 24 years. The Japanese company had announced plans to acquire global chemical compounding company AOC for $2.3 billion.
HSBC is scheduled to release its third-quarter results on Tuesday, and all eyes will be on what the bank will say about its latest reorganization. Additionally, traders will look for guidance on Adani Enterprises’ financing plans and the performance of its coal trading and airport units when the group’s flagship announces its quarterly results.
In commodities, oil firmed after falling about 6% on Monday, its biggest decline in more than two years, as markets focused on the prospect of a de-escalation of hostilities in the Middle East and upcoming U.S. economic data. It became. Gold has a higher edge.
This week’s main events:
U.S. job numbers, Conference Board Consumer Confidence Index, Tuesday
Alphabet Earnings Tuesday
Eurozone Consumer Confidence, GDP, Wednesday
US GDP, ADP employment, pending home sales, Wednesday
Meta Platform, Microsoft Earnings, Wednesday
U.S. Treasury holds quarterly repayment announcement for bond auction program on Wednesday
China manufacturing and non-manufacturing PMI, Thursday
Bank of Japan interest rate decision Thursday
Eurozone CPI, unemployment rate, Thursday
U.S. Personal Income, Expenditures, PCE Inflation Data, Initial Unemployment Insurance Claims, Thursday
Amazon, Apple earnings, Thursday
China Caixin Manufacturing PMI Friday
US employment, ISM manufacturing, Friday
The main movements in the market are:
stock
S&P 500 futures were little changed as of 10:33 a.m. Tokyo time.
Japan’s TOPIX rose 0.8%
Australia’s S&P/ASX 200 rises 0.5%
Hong Kong’s Hang Seng rose 1.2%
Shanghai Composite: Almost no change
Euro Stoxx50 futures unchanged
currency
Bloomberg Dollar Spot Index little changed
The euro was unchanged at $1.0812.
The Japanese yen rose 0.1% to 153.13 yen to the dollar.
The offshore yuan was little changed at 7.1448 yuan to the dollar.
cryptocurrency
Bitcoin rose 0.4% to $69,861.16
Ether rose 2.7% to $2,583.07
bond
The 10-year Treasury yield fell 1 basis point to 4.27%.
Japan’s 10-year bond yield remains almost unchanged at 0.965%
The Australian 10-year bond yield fell 3 basis points to 4.45%.
merchandise
West Texas Intermediate crude rose 0.5% to $67.69 per barrel.
Spot gold rose 0.2% to $2,748.79 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott and Ruth Carson.
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