Asian Stocks Steady as Traders Weigh Earnings: Markets Wrap

Asian Stocks Steady as Traders Weigh Earnings: Markets Wrap
Andreea Papuc
·3 min read

(Bloomberg) -- Asian stocks were steady Wednesday as traders weighed the latest U.S. earnings reports amid lingering concerns about growth risks from elevated inflation and China’s indebted property sector.

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Equities fluctuated in Japan, South Korea and Australia. The S&P 500 eked out a record high, with United Parcel Service Inc. and General Electric Co. up on strong results. U.S. contracts ticked higher.

The response to other reports later in the U.S. day was mixed: Robinhood Markets Inc. and Texas Instruments Inc. slid in extended trading, Google parent Alphabet Inc. and Microsoft Corp. were steady and Twitter Inc. advanced.

The 10-year U.S. Treasury yield steadied after declining and the yield curve flattened. The dollar held an advance versus peers. The energy crunch continues to ripple across the global economy. Coal stockpiles at U.S. power plants plunged to the lowest in at least 24 years. WTI crude oil traded above $84 a barrel.

In China, authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis. Separately, a top Chinese regulator called on companies to make “active preparations” to meet payments on their offshore bonds.

Investors are counting on earnings to support equity prices and so far the reporting season has been solid overall. But worries remain that over time rising raw material and wage costs and supply-chain snarls could crimp margins. Citigroup Inc. warned that profit growth may be close to peaking.

“Downside risks to the economy remain but investors are opting to look beyond these as companies continue to give us plenty of reason to be optimistic about what lies ahead,” Craig Erlam, senior market analyst at Oanda, wrote in a note. Such “enthusiasm may come and go, creating plenty of two-way action in the markets,” he added.

Elsewhere, the U.S. cranked up tensions with China by banning China Telecom (Americas) Corp. On the virus front, a Food and Drug Administration panel gave its backing to the Pfizer Inc. and BioNTech SE vaccine for young children.

Meanwhile, gold retreated back below $1,800 an ounce and Bitcoin slipped to around $60,500.

Here are some events to watch this week:

  • Earnings: Amazon, Apple, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group

  • Australia CPI, Wednesday

  • U.S. wholesale inventories, U.S. durable goods, Wednesday

  • Bank of Japan monetary policy decision, briefing, Thursday

  • ECB rates decision, President Christine Lagarde briefing, Thursday

  • U.S. GDP, initial jobless claims, Thursday

  • G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 9:07 a.m. in Tokyo. The S&P 500 rose 0.2%

  • Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.3%

  • Topix index was flat

  • Australia’s S&P/ASX 200 Index was little changed

  • Kospi index fell 0.1%

  • Hang Seng Index futures dropped 0.9%

Currencies

  • The Japanese yen was at 114.18 per dollar

  • The offshore yuan traded at 6.3781 per dollar

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was at $1.1600

Bonds

  • The yield on 10-year Treasuries was at 1.62%

  • Australia’s 10-year bond yield fell one basis point to 1.80%

Commodities

  • West Texas Intermediate crude was at $84.29 a barrel, down 0.4%

  • Gold was at $1,792.88 an ounce

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