Asian equity markets were poised to rise on Friday after solid earnings from technology companies led to gains on Wall Street, offsetting the impact of a report showing slowing US economic growth and higher-than-forecast inflation that caused Treasuries to dip.
(Bloomberg) — Asian equity markets were poised to rise on Friday after solid earnings from technology companies led to gains on Wall Street, offsetting the impact of a report showing slowing US economic growth and higher-than-forecast inflation that caused Treasuries to dip.
Futures for benchmarks in Hong Kong, Japan and Australia all pointed to advances, with the latter two poised to notch monthly gains. The S&P 500 on Thursday jumped 2%, the most since January, and the tech-heavy Nasdaq 100 rose 2.8% as a surge in advertising revenue helped Meta Platforms Inc. beat analyst estimates for profit, pushing the company’s shares 10% higher.
Treasuries fell, with the policy-sensitive two-year yield trading at 4.07%, as the unexpectedly high inflation data could prompt the Federal Reserve to keep interest rates higher for longer. The US central bank is expected to raise rates by a quarter percentage point at its meeting next week.
Meanwhile, the Bank of Japan is expected to leave overall monetary stimulus unchanged in its first policy decision under new governor Kazuo Ueda, with investors focused on what might be his opening changes after the BOJ’s first leadership transition in a decade.
Intel Corp. was higher in post-market trading after releasing results while Hasbro Inc. was the latest consumer company to top earnings estimates. That boosted confidence corporate America is coping relatively well with price pressures and policy tightening.
“Coming into this week, the biggest concern investors had was that any or all of the mega-cap tech were likely to disappoint — the setup was difficult because they had all run up into earnings,” Art Hogan, chief market strategist at B. Riley Wealth Management, said in an interview. “Yet there’s a ubiquitous feeling large-cap tech did a great job managing their businesses — it’s a sigh of relief the market is breathing.”
Dana Peterson, chief economist at The Conference Board, said the latest batch of economic data — including a slowdown in US jobless claims — showed the kind of cognitive dissonance investors have been grappling with as “typically when you have recessions, the labor market collapses with GDP, and we’re not seeing that.”
“We’re probably going to dip into a recession, maybe starting right now in the second quarter, but we really need to see data,” she said. “Our leading indicators index suggests that it’s starting to happen now, and consumers and CEOs have been anticipating recession for some time.”
Elsewhere, oil was little changed after wiping out all the gains from OPEC+’s surprise production cut at the beginning of the month, with West Texas Intermediate crude headed for its sixth month of declines, the longest such streak since January 2015. The dollar and gold were little changed while Bitcoin edged back toward the key $30,000 level.
Stocks
- S&P 500 futures were little changed as of 7:22 a.m. Tokyo time. The S&P 500 rose 2%
- Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 2.8%
- Hang Seng futures rose 1%
- S&P/ASX 200 futures rose 0.8%
- Nikkei 225 futures rose 1.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1029
- The Japanese yen was little changed at 133.93 per dollar
- The offshore yuan was little changed at 6.9298 per dollar
- The Australian dollar was little changed at $0.6629
Cryptocurrencies
- Bitcoin fell 0.1% to $29,604.75
- Ether fell 0.3% to $1,914.04
Bonds
- The yield on 10-year Treasuries advanced seven basis points to 3.52%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric and Carly Wanna.
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