Asian Stocks to Rise as Earnings Spur Wall Street: Markets Wrap

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(Bloomberg) — Asian stocks look set to rise Thursday after a US rally triggered by earnings and robust economic data, while bets on further Federal Reserve interest-rate hikes pushed up shorter maturity Treasury yields.

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Futures climbed for Japan, Australia and Hong Kong in the slipstream of a tech-led Wall Street jump that deposited the S&P 500 close to a two-month high, snapping a two-day decline. US futures fluctuated in early Asian trading.

Investors warmed to earnings from Moderna Inc. and PayPal Holdings Inc. as well as surprise US service-sector growth. Jitters over acute US-China tension also faded after House Speaker Nancy Pelosi completed her Taiwan visit.

Federal Reserve officials again signaled they will do what’s required to cool high inflation with rate increases even if that raises the risk of recession. The bond market reflected the rhetoric, with shorter-tenor yields rising but longer maturity rates decreasing, deepening a key yield curve inversion.

Oil has plunged on signs of slowing demand in a US inventory report and a small planned output boost by the Organization of Petroleum Exporting Countries.

Global stocks have now rebounded more than 9% from a June low, reducing year-to-date losses to about 15%. The big debate in markets is whether that points to complacency given that the bond market is flashing a warning that an economic slowdown looms.

“The volatility is not over and a lot of data is still out there, it’s still going to matter,” Ann Miletti, head of active equity at Allspring Global Investments LLC, said on Bloomberg Television. “I would still focus on quality here because there is a lot of choppiness to come, a lot of answers we still need.”

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What to watch this week:

  • BOE rate decision, Thursday

  • US initial jobless claims, trade, Thursday

  • Cleveland Fed President Loretta Mester due to speak, Thursday

  • US employment report for July, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.1% as of 7:19 a.m. in Tokyo. The S&P 500 rose 1.6%

  • Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 2.7%

  • Nikkei 225 futures climbed 1%

  • S&P/ASX 200 futures increased 0.5%

  • Hang Seng futures added 1%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0162

  • The Japanese yen was at 133.99 per dollar, down 0.1%

  • The offshore yuan was at 6.7616 per dollar

Bonds

Commodities

  • West Texas Intermediate crude was at $91.03 a barrel, up 0.4%

  • Gold was at $1,764.41 an ounce

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