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Asia Stocks, U.S. Futures Climb on Trade Optimism: Markets Wrap

Most stocks in Asia gained Tuesday after U.S. equities advanced as positive signs emerged on trade talks and ahead of earnings from some of the world’s biggest companies.
Illustrative image: Blur Chart, Energepic.com/Pexels South Africa, once renowned for the sophistication and liquidity of its financial markets and the probity and transparency of its corporate sector is now trading at a heavy discount. (Image: Blur Chart, Energepic.com / Pexels)
Bloomberg
By Bloomberg
22 Oct 2019
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The biggest gains were in South Korea, with modest increases in Hong Kong as markets opened. Australia rose and China was little changed. Japan is closed for a holiday. S&P 500 futures climbed suggesting there is scope for the underlying gauge to extend gains after it surpassed 3,000. Apple Inc. rallied to a record. The British pound steadied after U.K. Prime Minister Boris Johnson was thwarted in his latest attempt to get a Brexit deal approved.

S&P 500 rises above 3,000

U.S. President Donald Trump said China indicated that negotiations over an initial deal are advancing, raising expectations the nations’ leaders could sign an agreement at a meeting next month in Chile.

Focus will turn to earnings after analysts cut estimates for combined S&P 500 profits. Investors will get numerous chances to see how corporations are coping with the effects of trade tension, slowing growth and Brexit. Industry heavyweights McDonald’s Corp., Caterpillar Inc. and Amazon.com Inc. are all scheduled to deliver earnings this week.

“There are still residual concerns about the outlook as we head toward Christmas with memories of last year’s price capitulation still fresh,” Greg McKenna, strategist at McKenna Macro, wrote in a note to clients. “But earnings so far aren’t as bad -- or should I say much worse -- than thought. And there is still much cash on the sidelines, and the increase in bond yields is mildly supportive of stocks.”

Elsewhere, the Canadian dollar was steady as voters cast their ballots in a national election.

Here are some key events coming up this week:

  • Earnings season is in full swing with companies reporting including: Amazon.com, Microsoft, Daimler, Kia Motors, McDonald’s, Procter & Gamble, Caterpillar and UBS.
  • Thursday brings monetary policy decisions from the European Central Bank and Bank Indonesia.
  • U.S. factory orders for business equipment will provide a look into the strength of capital investment in September. The figures will show to what extent the latest tranche of tariffs on China and others is impacting investment decisions.

These are the main moves in markets:

Stocks

  • Hong Kong’s Hang Seng Index rose 0.1% as of 9:39 a.m. local time.
  • Australia’s S&P/ASX 200 Index rose 0.3%.
  • South Korea’s Kospi index gained 1%.
  • Shanghai Composite Index was little changed.
  • S&P 500 futures rose 0.2%. The S&P 500 climbed 0.7%.
  • The MSCI Asia Pacific ex-Japan Index climbed 0.4%.

Currencies

  • The yen was at 108.68 per dollar, down 0.1%.
  • The offshore yuan traded at 7.0692 per dollar.
  • The euro traded at $1.1154.
  • The British pound was steady at $1.2975, up 0.1%.
  • The Bloomberg Dollar Spot Index was little changed.

Bonds

  • The yield on 10-year Treasuries jumped five basis points to 1.80%. Futures were steady in Asia Tuesday with no cash trading because of the Japan holiday.
  • Australia’s 10-year bond yield rose three basis points to 1.18%.

Commodities

  • West Texas Intermediate crude rose 0.3% to $53.48 a barrel.
  • Gold was stable at $1,483.62 an ounce.

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