Asian share markets beyond China are set to follow US stocks higher on Tuesday after investors picked up on optimism from early corporate earnings reports.
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(Bloomberg) — Asian share markets beyond China are set to follow US stocks higher on Tuesday after investors picked up on optimism from early corporate earnings reports.
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Japan, Australia and South Korea equity futures edged higher, drawing further distance between their Chinese counterparts, which fell on concerns about President Xi Jinping’s push to tighten his control over the government. US equity futures were little changed.
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US-listed Chinese stocks slumped by a record 14% overnight, adding to declines Tuesday for Hong Kong stocks, which had their worst day since the financial crisis. Mainland equities fell to levels last seen in the early days of the pandemic.
Xi’s power grab also sent the offshore yuan to the lowest level since trading began a dozen years ago, as investors fret that concentrated decision-making could weaken growth and destabilize geopolitics. A unit of Carnival Corp., the cruise operator, canceled departures from Asian ports, in-part because of China’s Covid-zero policy.
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“We’re certainly staying away from the Chinese market right now because the political scene is not favorable,” Laila Pence, president of Pence Wealth Management, said in an interview on Bloomberg TV. “There’s a lot less risk in the US and just as much upside.”
A fifth of S&P 500 companies have now posted third-quarter earnings with more than half outperforming estimates. Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Apple Inc. report this week. The iPhone maker raised prices for its subscription music and TV services, citing higher input costs.
Manufacturing and services data for the US underwhelmed, indicating Federal Reserve rate hikes are beginning to slow activity. Fed officials have entered a blackout period ahead of the central bank’s meeting next week, where it’s expected to raise rates 75 basis points.
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UK bonds rallied in a sign of support for incoming UK Prime Minister Rishi Sunak following weeks of tumult.
Read More: VIX’s Tandem Swings With S&P 500 Show Options Obsession Persists
Key events this week:
- Earnings due this week include: Apple, Microsoft, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Alphabet, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Coca-Cola, HSBC, Intel, McDonald’s, Mercedes-Benz, Merck, Samsung Electronics, Shell, UBS, UPS, Vale, Visa, Volkswagen
- US Conference Board consumer confidence, Tuesday
- 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
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Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 7:30 a.m. Tokyo time. The S&P 500 gained 1.2%
- Nasdaq 100 futures fell 0.1%. The Nasdaq 100 gained 1.1%
- Hang Seng futures fell 0.2%
- S&P/ASX 200 futures rose 0.4%
- Nikkei 225 futures rose 0.7%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $0.9882
- The Japanese yen was little changed at 148.88 per dollar
- The offshore yuan was little changed at 7.3241 per dollar
Cryptocurrencies
- Bitcoin fell 0.1% to $19,358
- Ether fell 0.4% to $1,345.32
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.24%
- Australia’s 10-year yield was little changed at 4.14%
Commodities
- West Texas Intermediate crude rose 0.4% to $84.88 a barrel
- Spot gold was little changed
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