Stocks ticked sideways on Tuesday while the dollar headed towards its largest monthly fall for years . China’s CSI 300 index was flat amid the press briefing, after rising as much as 1.3% earlier. A gauge of Chinese property stocks extended losses. China said that will expand a program to support “white list” projects to 4 trillion yuan ($562-billion) from about 2.23 trillion yuan already deployed. Hong Kong stock benchmarks also trimmed gains.
Shares in Australia rose, while Japanese stocks fluctuated. US equity futures edged lower after the S&P 500 rose 0.5% on Wednesday. The Russell 2000 index of small-caps rose to the highest level in almost three years, while the Nasdaq 100 lagged, climbing just 0.1%
The focus on China was set to continue, with data due Friday expected to show the economy expanded 4.5% in the third quarter from a year ago, according to economists surveyed by Bloomberg. That would mark its weakest pace in six quarters.
Chinese President Xi Jinping has called on government officials to make every effort in the final quarter to help the country meet its annual growth target of around 5%. However, after a series of press conferences this month in which legislators offered no details of fresh stimulus, fears are now mounting that efforts may not be enough to revive growth.
Elsewhere, Australian bond yields rose after the country’s unemployment rate fell to 4.1% in September; economists polled by Bloomberg anticipated it would hold steady. The 10-year Treasury yield inched higher 4%, and a dollar index remained near its highest levels since early August.
The yen strengthened after declining against the greenback in the prior session, as Japanese exports suffered a surprise decline in September.
Taiwan Semiconductor Manufacturing Co.’s earnings will be closely watched on Thursday for any signs of slowing demand for chips, after ASML Holding NV offered surprisingly dour order numbers and cut its 2025 revenue forecast earlier in the week.
Gains for US small-caps on Wednesday indicated that investors are shifting out of the world’s largest tech companies that have soared on the back of the artificial intelligence boom and into other stocks that benefit in benign economic conditions.
“Investors may be looking to rotate away from large technology companies, which are widely owned and may have fewer clear catalysts going forward,” said David Russell at TradeStation. “With the election coming and the economy returning to balance, the long-awaited rotation away from megacaps to everything else could finally be at hand.”
US earnings
Traders also continued to wade through a raft of US corporate earnings. Morgan Stanley climbed 6.5% as traders and bankers joined the rest of their Wall Street rivals in posting better-than-expected revenue, fueling a 32% profit jump for the third quarter. United Airlines Holdings Inc. jumped 12% as earnings beat estimates.
The S&P 500 has already set 46 closing records this year, and according to the trading desk at Goldman Sachs Group Inc., that rally is primed to extend into the final months of 2024.
Scott Rubner, a managing director for global markets and tactical specialist at the bank, estimates the US stock benchmark can finish the year “well north of 6,000.” According to his calculations of data going back to 1928, the historical median of S&P 500 returns from 15 October to 31 December is 5.17%. In election years median returns are even higher, just over 7%, implying a year-end level of 6,270.
“The equity market selloff is cancelled, and a year-end rally is starting to resonate with clients shifting from hedging from the left-tail to the right-tail as institutional investors are getting forced into the market right now,” Rubner wrote in a note to clients on Tuesday. Professional investors are growing concerned about materially underperforming their benchmarks, he added.
In commodities, West Texas Intermediate rose after falling for a fourth day on Wednesday. Gold gained for a third day. Bitcoin was little changed on Thursday after rising 1.7% to touch the highest level since July on Wednesday.