(Bloomberg) – Stocks in Asia rose after US stocks ended January on high as signs of cooling inflation boosted risk appetite ahead of Wednesday’s Federal Reserve meeting.
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Benchmarks in Australia and Japan rose, while gauges in Hong Kong and mainland China faltered. Contracts for the S&P 500 fell after the index rose 1.5% on Tuesday. Nasdaq 100 futures also fell after the tech-heavy benchmark rose 1.6% to cap its best month since July and strongest start to a year since 2001.
The decline in US futures followed a string of post-US market corporate earnings reports that included a disappointing outlook from Electronic Arts Inc. and the first-ever forecast sales decline for Snap Inc.
Contracts for the Nifty 50 index of Indian blue chips also rose. Investors will focus on Adani Enterprises Ltd. Concentrate, a member of the benchmark that successfully raised $2.5 billion in a closely-watched follow-up sale of shares on Tuesday. The deal brings some relief to Gautam Adani following allegations of fraud by short seller Hindenburg Research.
Australian and New Zealand yields fell and a rally in Treasuries stabilized after the 10-year yield fell three basis points on Tuesday. An index of the dollar traded flat and the yen strengthened.
Contributing to gains for US stocks were wage bill data, which beat forecasts. Separate figures showed that the US housing market continued to cool. Another report highlighted the unexpected fall in consumer confidence.
The encouraging signs suggest that the Fed’s rate hikes over the past year have started to curb inflation. The central bank is set to announce a 25 basis-point rate hike on Wednesday, and investors will be watching Fed Chair Jerome Powell’s comments closely for signs that the tightening cycle may soon be interrupted.
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“We’re getting closer to the final rate,” Sassan Ghahramani, chief executive of SGH Macro Advisors, said in an interview with Bloomberg Television. “Released data does not justify 50 basis point hikes. If anything, I’d say it’s practically a 100 percent certainty they’ll make 25.”
Tuesday’s fourth-quarter results in the US were mixed. McDonald’s Corp. and Caterpillar Inc. underperformed earnings estimates, while General Motors Co. and Exxon Mobil Corp. topped forecasts, with the oil major posting its highest-ever full-year profit.
Important events this week:
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Eurozone Manufacturing PMI, CPI, Unemployment, Wednesday
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US Construction Spending, ISM Manufacturing, Light Vehicle Sales, Wednesday
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FOMC rate decision, Fed Chair Jerome Powell press briefing, Wednesday
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Wednesday’s earnings include: Meta Platforms and Peloton Interactive
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ECB interest rate decision for the euro zone, press conference by President Christine Lagarde, Thursday
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UK BOE interest rate decision, Thursday
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US Factory Orders, Initial Jobless Claims, US Durables, Thursday
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Thursday’s gains include: Alphabet, Apple, Amazon, Qualcomm and Deutsche Bank and Santander
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Eurozone S&P Global Eurozone Services PMI, PPI, Friday
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US Unemployment, Nonfarm Payrolls, Friday
Some of the key movements in the markets:
Shares
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S&P 500 futures were down 0.3% as of 11:49 a.m. Tokyo time. The S&P 500 rose 1.5%
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Nasdaq 100 futures fell 0.5%. The Nasdaq 100 rose 1.6%
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Japan’s Topix rose 0.2%
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Australia’s S&P/ASX 200 rose 0.4%
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Hong Kong’s Hang Seng fell 0.5%
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The Shanghai Composite fell 0.3%
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Euro Stoxx 50 futures up 0.2%
currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0853
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The Japanese yen was little changed at 130.01 per dollar
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The offshore yuan was little changed at 6.7576 per dollar
cryptocurrencies
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Bitcoin rose 0.6% to $23,086.03
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Ether was up 0.3% to $1,582.52
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raw materials
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West Texas Intermediate crude was up 0.2% to $79.05 a barrel
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Spot gold fell 0.2% to $1,925.34 an ounce
This story was created with the support of Bloomberg Automation.
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