Asian stock futures climbed, suggesting opening gains around the region on Wednesday after a rally on Wall Street that was fueled by strength in US consumer confidence and home sales.
Contracts rose for benchmarks in Japan, Australia and Hong Kong, while an index of US-listed Chinese stocks climbed the most in three weeks.
Yet the data showing economic resilience also underscored the likelihood that the Federal Reserve has further to go in tightening monetary policy. Treasuries dropped Tuesday, pushing yields higher at the same time as the Nasdaq 100 jumped almost 2% and the S&P 500 halted a two-day drop.
A late-breaking Wall Street Journal report that the Biden administration was considering new curbs on exports of artificial intelligence chips to China set off a retreat in postmarket trading for some US tech stocks. That took some of the shine off the positive lead for Asian shares and saw US equity futures decline.
Tech megacaps had earlier led the rebound in US equities. Tesla Inc. rallied after a 6% plunge, Snowflake Inc. jumped on an artificial intelligence-related partnership with Nvidia Corp. and Facebook’s parent Meta Platforms Inc. gained as Citigroup Inc. lifted its target. Alphabet Inc. underperformed with an analyst saying Google’s owner was moving “too fast” in AI.
Investors in Asia will also be watching the release of figures for Chinese industrial profits, amid calls for Beijing to provide more stimulus, and Australian inflation data, which will help shape the central bank’s thinking on interest rates.
The offshore yuan and the Australian dollar were both steady in early Asian trading. The yen strengthened slightly while hovering near 144 versus the dollar, a weak area that has drawn verbal intervention from authorities in Japan.
Later Wednesday, the focus will turn back to a gathering in Portugal and a panel discussion featuring the chiefs of the Fed, the European Central Bank, the Bank of Japan and the Bank of England.
For the first time since early 2022, the US consumer confidence report showed that a larger percentage of people expected higher stock prices relative to lower equity values, according to Bespoke Investment Group. Meanwhile, new-home sales advanced to the fastest pace in over a year.
“Stocks are bouncing back after some strong US economic data gave a boost to consumer discretionary stocks and as investors piled back into AI trades,” said Edward Moya, senior market analyst at Oanda. “The strong consumer confidence report will likely suggest expectations are not for the labor market to deteriorate quickly, which should confirm expectations that a recession will not happen this year, but most likely next.”
In the run-up to the results of the Fed’s stress test, a nearly $3 billion exchange-traded fund tracking regional lenders was up over 1.5%. Analysts largely expect banks to sail through the tests even as regulators explore more stringent requirements in the aftermath of a few collapses in the financial industry.
Key events this week:
- US wholesale inventories, goods trade balance, Wednesday
- Fed to unveil results of annual banking industry stress test, Wednesday
- Policy panel with ECB’s Christine Lagarde, Fed Chair Jerome Powell, BOJ’s Kazuo Ueda and BOE’s Andrew Bailey, Wednesday
- Eurozone economic confidence, consumer confidence, Thursday
- US GDP, initial jobless claims, Thursday
- Atlanta Fed President Rafael Bostic speaks, Thursday
- China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
- US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.2% as of 8:24 a.m. Tokyo time. The S&P 500 rose 1.15% Tuesday
- Nasdaq 100 futures fell 0.4%. The Nasdaq 100 rose 1.75%
- Nikkei 225 futures rose 0.7%
- Australia’s S&P/ASX 200 Index futures rose 0.4%
- Hang Seng Index futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0956
- The Japanese yen rose 0.1% to 143.90 per dollar
- The offshore yuan was little changed at 7.2258 per dollar
- The Australian dollar was little changed at $0.6682
Cryptocurrencies
- Bitcoin was little changed at $30,633.13
- Ether fell 0.3% to $1,886.46
Bonds
- The yield on 10-year Treasuries advanced four basis points to 3.76% Tuesday
- Australia’s 10-year yield was little changed at 3.93%
Commodities
- West Texas Intermediate crude rose 0.3% to $67.88 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Rita Nazareth.
