Stocks Mixed as Asia Rises, Tech Hurts US Futures: Markets Wrap

(Bloomberg) -- Stocks were mixed as major Asian indexes rose and US futures fell after post-market slumps in Google parent Alphabet Inc. and Microsoft Corp. marred a three-day rally on Wall Street.

Equities rose in China, Japan and South Korea while contracts for the Nasdaq 100 slid. Alphabet dropped as much as 7% in after-market trading on revenue that came in below expectations and Microsoft lost 8% following a disappointing revenue forecast.

Positive signs for Asia included China’s central bank and foreign-exchange regulator indicating they would maintain the healthy development of stock and bond markets, while reiterating that the yuan would be “basically stable.”

A near 5% rebound in a gauge of US-listed Chinese stocks on Tuesday helped claw back some of the record loss suffered in the wake of President Xi Jinping breaking with China’s collective leadership. Hong Kong’s tech gauge made strong gains for a second day but was still short of recouping Monday’s near 10% slide. 

A gauge of the dollar was unchanged while the pound fell on a report that UK Prime Minister Rishi Sunak was considering a delay to next week’s planned fiscal statement. 

The yen weakened to around 148 per dollar ahead of the Bank of Japan’s policy decision Friday, when monetary settings are expected to be kept unchanged.

Meanwhile, the central bank boosted purchases of longer-dated government bonds as rising yields threatened to loosen its grip on the yield curve.

Treasuries held to gains, with the 10-year yield falling below 4.10% after data for US home prices and consumer confidence underscored concern over the economic outlook. 

Australia’s 10-year yield followed Treasuries lower, while the rate on the policy-sensitive three-year maturity fluctuated after third-quarter inflation data beat estimates.

While the US data haven’t changed expectations that the Federal Reserve will hike interest rates by 75 basis points next month, they add to signs that an end to aggressive tightening may come next year, taking pressure off global markets.

Analysts are also projecting challenges for now in Europe, with a jumbo hike of 75 basis points expected from the European Central Bank on Thursday. That’s even as many economists now reckon a recession has begun in the euro region.

“Sentiment’s still incredibly fragile. We do expect to see further market volatility,” Catherine Yeung, investment director at Fidelity International, said on Bloomberg Radio. “All eyes are still on the rate cycle globally speaking as well as where inflation does go. I think going into the end of the year, again, it’s going to be volatile.”

Despite the disappointment from the two tech giants, of the 28% of S&P 500 companies that have reported earnings, around 70% have outperformed estimates, according to data compiled by Bloomberg.  The Coca-Cola Co. and General Motors Co. closed the US session in green after topping analysts’ earnings estimates. 

Elsewhere, oil fell as an industry report showed a rise in US crude stockpiles and investors fretted about weaker demand amid slowing growth. 

Key events this week:

• Earnings due this week include: Apple, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Intel, McDonald’s, Mercedes-Benz, Merck, Samsung Electronics, Shell, Vale, Visa, Volkswagen
• 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 fell 0.9% as of 1:50 p.m. Tokyo time. The S&P 500 rose 1.6% Tuesday
• Nasdaq 100 futures fell 1.9%. The Nasdaq 100 rose 2.1%
• Euro Stoxx 50 futures fell 0.2%
• The Topix Index rose 0.9%
• The S&P ASX Index was little changed
• The Hang Seng Index rose 2.2%
• The Shanghai Composite Index rose 1.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.1% to $0.9955
• The Japanese yen fell 0.2% to 148.19 per dollar
• The offshore yuan was little changed at 7.3076 per dollar
• The British pound fell 0.1% to $1.1455

Cryptocurrencies

• Bitcoin rose 0.4% to $20,266.14
• Ether rose 1% to $1,488.74

Bonds

• The yield on 10-year Treasuries fell one basis point to 4.09%
• Australia’s 10-year yield fell 12 basis points to 3.96%

Commodities

• West Texas Intermediate crude fell 0.5% to $84.91 a barrel
• Spot gold rose 0.2% to $1,656.13 an ounce

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