Tech Leads US, Europe’s Prospects Low; Asia Incorporated: Markets Package


(Bloomberg) — U.S. and European stock futures edged lower on Wednesday, while Asian stocks capped modest gains on investor sentiment following mixed corporate earnings.

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Nasdaq 100 contracts were down 0.8% on Tuesday after a slight decline in the underlying index, as Microsoft Corp. The cloud computing business moderated its volume at the start of the year as the sales outlook slowed. Benchmark S&P 500 and Euro Stoxx 50 futures also fell.

Japanese stocks rose in concert against the yen, while Australian shares erased morning gains after inflation hit its fastest pace in 32 years. Data from New Zealand also showed that consumer price growth was flat for more than three decades, prompting traders to question global optimism that inflation was peaking.

South Korea’s Kospi index rose more than 1% in action after the Lunar New Year holidays. Hong Kong and mainland China markets are closed.

Inflation was rampant in the exchange rate and exchange markets. The Australian dollar hit its highest level since August. Benchmark 10-year yields for Australia and New Zealand fell sharply in early trading before reversing course after the price data.

Treasuries held their gains broadly, while a gauge of dollar strength was marginally lower.

Oil rose on Tuesday after falling and gold inches pushed the precious metal to its highest level since April after recent gains.

Shares of Adani Group companies tumbled after U.S. activist investor Hindenburg Research LLC said it was shorting the empire’s shares and accused Asian tycoon-owned firms of market manipulation and accounting fraud.

The news from Microsoft reflects a cautious outlook for corporate profits. The software giant beat earnings estimates, initially sending its shares up in after-hours trading before the gains were quickly reversed by warnings from its cloud computing business.

Homebuilder DR Horton Inc. also beat forecasts, Post-It note maker 3M Co. beat estimates and Texas Instruments Inc., one of the world’s biggest chipmakers, experienced its first sales decline since 2020.

Bitcoin fell 2.5 percent, suffering its first two-day decline of the year, after Microsoft’s outlook dented investors’ confidence in the cryptocurrency.

The U.S. trading day on the New York Stock Exchange was marked by a crisis that sent Wells Fargo and AT&T Inc. down sharply, and AT&T Inc. It rose sharply in the opening seconds of the trade before returning to normal after 20 minutes. He said some exchanges would be “empty and empty” after hundreds of securities began trading without an opening bid price.

Although corporate reports are uncertain, Mark Matthews, head of Asia research at Julius Baer, ​​said earnings will remain strong this year and the S&P 500 could rise as much as 10%.

“I think we’re going to get a soft landing — a very mild decline that you’ll notice very easily,” he said in an interview with Bloomberg Television. “We will be soft economy-wise in the first half and then we should recover in the second half. The market may be pricing in that recovery now – it seems.”

Key events this week:

  • Earnings for the week include: Abbott Laboratories, ASML Holdings, AT&T, Boeing, International Business Machines, NextEra Energy, Tesla (Wednesday); American Airlines, Blackstone, Comcast, Diageo, Intel, LVMH Moet Hennessy Louis Vuitton, Mastercard, SAP, Southwest Airlines, Visa (Thursday); American Express, Charter Communications, Chevron, HCA Healthcare (Friday)

  • US MBA Mortgage Applications, Philadelphia Fed Manufacturing Activity, Wed

  • US fourth quarter GDP, new home sales, first jobless claims, Thursday

  • US Personal Income/Expenditure, PCE Deflator, University of Michigan Consumer Sentiment, Pending Home Sales, Friday

Some of the major activities in the markets are-

Shares

  • S&P 500 futures were down 0.5% as of 2:44 p.m. Tokyo time. The S&P 500 fell 0.1%

  • Nasdaq 100 futures fell 0.8%. The Nasdaq 100 fell 0.2%

  • Australia’s S&P/ASX 200 fell 0.3%

  • Japanese stocks rose 0.4 percent

  • Euro Stoxx 50 futures fell 0.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed.

  • The euro was little changed at $1.0894.

  • The Japanese yen fell 0.3% to 130.54 per dollar.

  • The offshore yuan was little changed at 6.7795 against the dollar.

Crypto currencies

  • Bitcoin fell 1 percent to $22,681.76

  • Ether fell 3.2% to $1,547.87

Bonds

  • The 10-year Treasury yield rose one basis point to 3.46 percent.

  • Japan’s 10-year yield rose two basis points to 0.44%.

  • Australia’s 10-year yield rose four basis points to 3.50%

Goods

  • West Texas Intermediate crude rose 0.2 percent to $80.33 a barrel.

  • Spot gold fell 0.5% to $1,927.34 an ounce

This story was produced with the help of Bloomberg Automation.

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©2023 Bloomberg LP



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