(Bloomberg) -- Asian equities rose along with European stock futures as investors geared up for the US election and key economic data that will set the stage for the next Federal Reserve decision.
Benchmark gauges in Tokyo, Australia, Hong Kong and South Korea climbed, while stocks in China retreated. US futures edged higher after most major groups in the S&P 500 gained at the start of the busiest week for corporate earnings. Treasury yields slipped.
Markets are bracing for the potential prospect of Donald Trump returning to the White House, with most major polls showing him locked in a tight race with Vice President Kamala Harris. Crypto companies surged, and Bitcoin rose past $71,000 for the first time since June, as the former president is seen as supportive of the digital tokens.
A victory for Trump would be more beneficial for stocks and Bitcoin relative to his Democratic opponent, while a Harris presidency would bring slightly more relief to housing costs, according to a Bloomberg Markets Live Pulse survey. Some 38% of respondents see equities accelerating a year from now under the Republican candidate, versus 13% under the Democrat.
Trump’s chances of a victory are increasing and “that’s seen as good for US stocks in the short run,” said Phillip Wool, head of portfolio management at Rayliant Global Advisors. “Deficits will increase, inflation will come back, and it could slow Fed rate cuts. All of this would put upward pressure on the dollar, which would be a headwind to other economies across Asia.”
It’s shaping up to be a busy week for investors as the countdown to the US election begins, with corporate earnings and economic data also expected to help dictate the market’s near-term direction. Just days before the Federal Reserve gathers to reflect on the appropriate tempo of rate cuts, data is set to show underlying resilience in the US economy and a temporary hiccup in jobs growth.
Investors are awaiting results from firms accounting for nearly 42% of the S&P 500’s market capitalization, including several big techs like Apple Inc., Microsoft Corp. and Meta Platforms Inc.
“Near-term focus is shifting to megacap earnings that kick off today with Google (Alphabet),” said Charu Chanana, chief investment strategist at Saxo Markets. “There is still an expectation that AI spending will be maintained and that could continue to be a significant driver of broader equity momentum.”
Apple Inc.’s iPhone exports from India jumped by a third in the six months through September, people familiar with the matter said. This underscores the company’s push to expand manufacturing in the country and reduce dependence on China.
In Europe, Novartis AG boosted its annual profit guidance for the third straight quarter, helped by rising sales of its blockbuster medicines for psoriasis and cancer.
In currency markets, the yen strengthened after Japanese Prime Minister Shigeru Ishiba promised to restore political stability in a bid to maintain power, following his ruling coalition’s failure to win a majority in the lower house.
Traders are also awaiting a BOJ policy decision which is due later this week. Data showed that Japan’s labor market tightened in September, indicating sustained pressure on companies to raise wages ahead of the BOJ meeting.
A gauge of the dollar was little changed while 10-year Treasury yields dropped after rising the previous session amid weak demand for a pair of note auctions.
Meanwhile, the Biden administration finalized restrictions on investments by US individuals and companies into advanced technology in China, including semiconductors, quantum computing and artificial intelligence.
Separately, data showed investors yanked money out of exchange-traded funds that buy Chinese stocks last week, halting a streak of inflows as the latest stimulus measures failed to impress investors.
HSBC Holdings Plc announced a fresh multibillion-dollar stock buyback as it reported better-than-estimated earnings, days after unveiling a major overhaul of its businesses. Over in India, traders will be looking for a steer on Adani Enterprises Ltd.’s fund raising plans and performance of its coal trading and airports units when the flagship of the Adani Group reports its quarterly earnings.
In commodities, oil steadied — after tumbling the most in more than two years on Monday — as the market focused on the prospect for easing hostilities in the Middle East and upcoming US economic data. Gold advanced toward a record.
Key events this week:
US job openings, Conference Board consumer confidence, Tuesday
Alphabet earnings, Tuesday
Eurozone consumer confidence, GDP, Wednesday
US GDP, ADP employment, pending home sales, Wednesday
Meta Platforms, Microsoft earnings, Wednesday
US Treasury Department holds quarterly refunding announcement of bond-auction plans, Wednesday
China Manufacturing and non-manufacturing PMI, Thursday
Bank of Japan rate decision, Thursday
Eurozone CPI, unemployment, Thursday
US personal income, spending and PCE inflation data, initial jobless claims, Thursday
Amazon, Apple earnings, Thursday
China Caixin manufacturing PMI, Friday
US employment, ISM manufacturing, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 6:33 a.m. London time
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.2%
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0810
The Japanese yen rose 0.2% to 152.92 per dollar
The offshore yuan fell 0.2% to 7.1586 per dollar
The British pound was little changed at $1.2966
Cryptocurrencies
Bitcoin rose 2.1% to $71,083.57
Ether rose 4.1% to $2,618.19
Bonds
The yield on 10-year Treasuries declined two basis points to 4.27%
Germany’s 10-year yield was little changed at 2.29%
Britain’s 10-year yield advanced two basis points to 4.25%
Commodities
Brent crude fell 0.2% to $71.27 a barrel
Spot gold rose 0.4% to $2,753.53 an ounce
This story was produced with the assistance of Bloomberg Automation.
