Asia Stocks to Edge Higher as Earnings Season Eyed: Markets Wrap

(Bloomberg) -- Asian stocks looked set to open firmer Tuesday after their U.S. counterparts notched yet more all-time highs as investors awaited second-quarter earnings season. Treasury yields were steady as the U.S. sold debt.

Futures climbed in Japan, Australia and Hong Kong. U.S. contracts were little changed. Financials and communication services shares led the S&P 500 to another record, while Tesla, Nvidia and Google parent Alphabet helped push the tech-heavy Nasdaq 100 to new highs.

The U.S. Treasury sold $58 billion of three-year notes at yields slightly higher than before the auction. A sale of $38 billion of 10-year notes was greeted by stronger demand. The dollar gained against most major peers.

Oil was steady after dipping for the first time in three days as traders grappled with the demand implications of a Covid-19 resurgence in several regions and slowing economic growth in China.

Expectations for a solid earnings season is underpinning the stock rally, as investors ponder how central banks will unwind the support driving the recovery from the pandemic. Still, inflationary pressures remain a concern, as does the spread of the delta variant and a slowdown in vaccination rates.

“Wall Street is bracing for a volatile week as market participants are divided on a bevy of issues that include whether to bet on growth or cyclicals and if inflation acceleration intensifies,” Edward Moya, senior market analyst at Oanda, said in a note. “One thing that everyone agrees upon is that second quarter earnings will be stellar.”

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Here are some events to watch this week:

• Bank of America, BlackRock, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley are among firms starting the U.S. earnings season
• A closely-watched inflation metric -- the June U.S. consumer price index -- will offer insight into the inflationary pressures Tuesday
• The Reserve Bank of New Zealand’s latest interest rate policy Wednesday
• Bank of Korea monetary decision Thursday
• China second-quarter GDP, key economic indicators Thursday
• Federal Reserve Chair Jerome Powell appears before the Senate Banking Committee to deliver the semi-annual Monetary Policy Report to Congress Thursday
• Bank of Japan interest rate decision Friday

These are some of the main moves in financial markets:

Stocks

• S&P 500 futures were flat as of 7:17 a.m. in Tokyo. The S&P 500 rose 0.4%
• Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.4%
• Nikkei 225 futures gained 0.5%
• Australia’s S&P/ASX 200 Index futures added 0.3%
• Hang Seng Index futures were up 0.3%

Currencies

• The Japanese yen was at 110.35 per dollar
• The offshore yuan traded at 6.4769 per dollar
• The Bloomberg Dollar Spot Index rose 0.1%
• The euro traded at $1.1862

Bonds

• The yield on 10-year Treasuries was little changed at 1.36%

Commodities

• West Texas Intermediate crude was at $74.12 a barrel
• Gold was at $1,806.54 an ounce

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