(Bloomberg) — US futures advanced as investors await the next batch of earnings from some of the world’s biggest companies. Treasury yields dipped and the dollar gained.
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Contracts on the S&P 500 fluctuated before turning green, while those on the Nasdaq 100 came off session lows to trade little changed. Twitter Inc. gained as much as 2.1%, narrowing the gap to Elon Musk’s offer price ahead of the Oct. 28 court-issued deadline for the deal. Tesla Inc. slipped more than 2% after lowering prices across its lineup in China.
While the path of US interest rates remains at the center of investors’ attention, their focus this week will also be on earnings of megacap technology companies, among the key profit-growth engines for the S&P 500. The five biggest tech firms by revenue – – Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. — are projected to report the steepest contraction in earnings in three years, data compiled by Bloomberg show.
“It’s clear demand is slowing but so far we’ve seen pockets of tech like software, cloud computing still being quite resilient,” said Laura Cooper, a senior investment strategist at BlackRock International Ltd., on Bloomberg TV. “We will be watching for any signs of cracks coming through that could put a dent to some of these earnings expectations.”
A gauge of dollar strength rose in choppy trading that saw wild swings in the yen amid signs of a second intervention from Japanese authorities in two sessions. British bonds rallied after Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, putting former chancellor Rishi Sunak closer to becoming the next prime minister.
The Stoxx Europe 600 Index climbed more than 1%. Media, travel and leisure and utilities rose, while energy underperformed as oil declined amid sour sentiment over China. Prosus NV slumped more than 13%.
China’s yuan and the country’s stocks tumbled in Hong Kong to the lowest level since the depths of the 2008 global financial crisis even as economic growth data beat estimates. The onshore yuan depreciated as much as 0.4%, while the Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, plunged more than 5%, with investors spooked by President Xi Jinping’s tightening grip on China’s ruling party. US-listed Chinese stocks including Alibaba Group Holding Ltd. to JD.com Inc. tumbled in premarket trading.
“Market sentiment could remain cautious near-term on China, on concerns of a shift of focus towards more state control versus a market-driven approach under the new leadership team,” said Xiaojia Zhi, the chief China economist at Credit Agricole CIB. “The exit path from zero-Covid is not yet clear.”
Chinese economic data that was delayed last week and published Monday showed a mixed recovery, with unemployment rising and retail sales weakening despite a pickup in growth. Yet Xi’s Covid-zero campaign looks likely to continue to drag on the economy and there has been speculation that his “common prosperity” goal may even lead to property and inheritance taxes.
Key events this week:
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Earnings due this week include: Apple, Microsoft, Exxon Mobil, Ford Motor, Credit Suisse, Airbus, Alphabet, Amazon, Bank of China, Boeing, Caterpillar, Cnooc, Coca-Cola, HSBC, Intel, McDonald’s, Mercedes-Benz, Merck , Samsung Electronics, Shell, UBS, UPS, Vale, Visa, Volkswagen
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PMIs for US, Monday
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US Conference Board consumer confidence, Tuesday
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Bank of Canada rate decision, Wednesday
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ECB rate decision, Thursday
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US GDP, durable goods orders, initial jobless claims, Thursday
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Bank of Japan policy decision, Friday
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US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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Futures on the S&P 500 rose 0.4% as of 8:27 am New York time.
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Futures on the Nasdaq 100 rose 0.1%.
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Futures on the Dow Jones Industrial Average rose 0.5%.
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The Stoxx Europe 600 rose 1.4%
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The MSCI World index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.5%.
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The euro fell 0.3% to $0.9837
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The British pound was little changed at $1.1300
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The Japanese yen fell 1% to 149.12 per dollar
Cryptocurrencies
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Bitcoin fell 0.6% to $19,375.81
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Ether rose 1.3% to $1,347.81
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.20%
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Germany’s 10-year yield declined eight basis points to 2.33%
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Britain’s 10-year yield declined 20 basis points to 3.86%
Commodities
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West Texas Intermediate crude fell 2.2% to $83.16 a barrel
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Gold futures fell 0.2% to $1,652.30 an ounce
–With assistance from Charlotte Yang and Brett Miller.
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