Asian Stocks Poised to Track US Gains; Oil Drops: Markets Wrap

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(Bloomberg) — Asian stocks are poised to track another strong performance on Wall Street, with stocks reaching all-time highs. The price of oil fell as concerns about Israel attacking Iranian energy facilities eased.

Futures show Tokyo stocks rose more than 1% after trading resumed from the holiday on Monday, while smaller gains are expected in Sydney and Hong Kong. With earnings reports poised to stimulate US sentiment this week, the S&P 500 rose nearly 1%, setting another record high – its 46th this year. This is an indication that investors are not deterred by lower expectations for third-quarter results and are instead betting on positive surprises.

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The price of oil fell nearly 3% in early trading Tuesday, after the Washington Post reported that Israel does not plan to strike Iranian oil or nuclear facilities. That extended losses from Monday after China’s finance ministry’s expected weekend briefing lacked specific new incentives to boost consumption in the world’s largest crude oil importer.

The S&P 500 index hovered near 5,860 on Monday on thin trading volume. The Nasdaq 100 rose 0.8%. The Dow Jones Industrial Average rose 0.5%. Nvidia Corp. led gains in the majors, and Apple Inc. On bullish analyst call, Tesla Inc. rebounded. After last week’s decline. Goldman Sachs Group Inc. filed. And Citigroup Inc. Before the results.

Treasury bond futures fell slightly while cash trading was closed for the US holiday. The dollar rose. Bitcoin jumped by 5%.

Strategists expect S&P 500 companies to post their weakest results in the past four quarters, with only a 4.3% increase over last year, Bloomberg Intelligence data shows. Meanwhile, corporate guidance indicates a jump of about 16%. These strong forecasts indicate that companies can easily exceed market expectations.

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“Wall Street has been undervaluing corporate America lately,” said Callie Cox of Ritholtz Wealth Management. “This environment is hard to read, and I wouldn’t blame anyone approaching this rally with a grain of salt. We continue to believe the biggest — and most costly — risk here is to miss the recovery and eventual rally to the upside.

Chinese stocks overcame an early bout of volatility to post their biggest gains in a week on Monday, suggesting investors are hopeful the government will make good on its promise to provide more fiscal support.

However, there are more signs of economic weakness, with a report released on Monday showing that export growth in September unexpectedly rose by just 2.4% in dollar terms from a year earlier to the lowest level since May. A gauge of US-listed Chinese stocks fell more than 2% overnight.

Meanwhile, in a show of hot demand for Japan’s biggest listing in six years, Tokyo Metro Co.’s initial public offering raised 348.6 billion yen ($2.3 billion) after the company priced shares at the top of the marketed range, people familiar with the matter said. He said the matter.

In the US, earnings season unofficially kicked off on Friday, led by leading financial firms JPMorgan Chase & Co. and Wells Fargo & Co. In addition to other major banks’ reports this week, traders will be paying close attention to the results of major companies such as Netflix. Inc. and JB Hunt Transport Services Inc.

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The preliminary round of third-quarter financial results last week showed that U.S. companies are benefiting from lower interest rates early in the Federal Reserve’s easing cycle, according to Bank of America Corp. strategists.

The Bank of America team, which includes Ohsung Kwon and Savita Subramanian, said the easing of interest rate pressure was evident in increased debt underwriting, mortgage applications and refinancing activity, as well as signs of a bottom in manufacturing.

For Solita Marcelli, of UBS Global Wealth Management, the third-quarter results should confirm that large-cap earnings growth is strong against a resilient macro backdrop.

“We maintain our positive outlook for US stocks, supported by healthy economic and earnings growth, the Fed easing cycle, and the AI ​​growth story,” she said. “Although valuations are high, we believe they are reasonable under favorable conditions.”

Marcelli reiterated her S&P 500 price target of 6,200 by June 2025, and continues to like “AI beneficiaries and high-quality stocks.”

The company’s most prominent features:

• B. Riley Financial Inc., a loss-making brokerage and investment firm looking to reduce debt, agreed to sell a majority stake in its Great American Holdings business to funds managed by Oaktree Capital Management LP.
• Adobe Inc. revealed has developed artificial intelligence tools that can create and edit videos, and has joined major tech companies and startups in trying to capitalize on demand for the emerging technology.
• Caterpillar was downgraded to underweight by Morgan Stanley, indicating a disconnect between fundamentals and the stock price.
• Amgen Inc. was downgraded. to hold with Truist Securities, which said the upcoming obesity data was already priced into the stock.
• SoFi Technologies Inc. to an agreement to use $2 billion of Fortress Investment Group LLC funds to originate personal loans.
• Elliott Investment Management has called a special shareholder meeting for Southwest Airlines, officially kicking off the company’s first U.S. proxy fight since 2017.

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Main events this week:

• Industrial production in the eurozone, Tuesday
• US Empire Manufacturing Index, Tuesday
• Goldman Sachs, Bank of America, Citigroup earnings, Tuesday
• Bloomberg Editor-in-Chief John Micklethwaite interviewed Donald Trump at the Economic Club of Chicago on Tuesday.
• The Fed’s Mary Daly and Adriana Kugler speak Tuesday
• Morgan Stanley earnings on Wednesday
• European Central Bank interest rate decision, Thursday
• US Retail Sales, Unemployment Claims, Industrial Production, Thursday
• Fed Governor Austin Goolsbee speaks on Thursday
• Chinese GDP, Friday
• Housing starts in the US on Friday
• The Fed’s Christopher Waller and Neel Kashkari speak on Friday

Some key movements in the markets:

Stocks

• Hang Seng futures rose 0.1% as of 7:14 a.m. Tokyo time
• S&P/ASX 200 futures rose 0.4%.
• Nikkei 225 futures rose 1.4%.

Currencies

• There was little change in the euro at $1.0908
• There was little change in the pound sterling at $1.3055
• There was little change in the Japanese yen at 149.77 to the dollar
• The yuan was unchanged in external transactions at 7.0956 to the dollar

Cryptocurrencies

• Bitcoin was little changed at $65,963.29
• Ether was little changed at $2,621.80

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.10%.

Goods

• There was little change in spot gold
• West Texas Intermediate crude fell 2.7% to $71.87 a barrel

This story was produced with assistance from Bloomberg Automation.

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