Asia Stocks Face Cautious Start As U.S. Futures Slip: Markets Wrap
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(Bloomberg) -- Asian markets are poised for a cautious open as US stock futures slipped in early Asia trading after disappointing results from companies including Netflix Inc. and Tesla Inc.
Equity futures for Japan fell, while contracts for Australia were little changed. A reprieve from a two-day slide in Hong Kong may be in store, with equity futures pointing to a small gain. An index of US-listed Chinese companies bounced back Wednesday from their worst day in almost a month.
Meanwhile, futures for the S&P 500 and Nasdaq 100 ticked lower in Asia after Netflix declined in postmarket trading as sales missed estimates and its third-quarter forecast also fell short. Tesla fell after profitability shrank in the second quarter, a sign the electric-vehicle maker’s margins are being squeezed.
In official trading Wednesday, the S&P 500 rose for a third day. The tech-heavy Nasdaq 100 ended marginally lower and the blue-chip Dow Jones Industrial Average extended its winning streak into an eighth day, the longest rally since September 2019. Apple Inc. advanced after Bloomberg reported on its efforts to build artificial intelligence tools, while Goldman Sachs Group Inc. ended in the green even after its profit slump stood in contrast to beats earlier in the week from peer investment firms.
US Treasuries gained, spurred by a UK inflation report earlier in the session that sent guilt yields tumbling. Price pressures in Britain dropped to the lowest in 15 months, adding to evidence central banks can go easier on raising interest rates. However, gains across the Treasury curve eased following a spike in commodities including wheat after a warning from Russia that any ships to Ukraine would be seen as carrying arms.
The dollar rose against almost all of its Group of 10 counterparts, with the pound falling as much as 1.3% in the biggest intraday drop in more than four months. The yen and Aussie were also among the worst performers Wednesday.
In the US, new home construction retreated in June after surging a month earlier, while applications to build, a proxy for future construction, slipped, data Wednesday showed.
In Asia on Thursday, Japan’s trade deficit is expected to narrow last month as exports increased, while Australia is due to report jobs figures for June following an unexpected surge the prior month.
Evidence of easing price pressures in the US and UK is bolstering hopes among investors a campaign of monetary tightening is drawing to a close. However, shaky economic reports have made clear the Federal Reserve is far from claiming victory.
“The risk of recession has receded dramatically,” said Neil Dutta, head of economics at Renaissance Macro Research, on Bloomberg TV. “I think the markets are right to allocate a little bit more to the soft-landing story, but I think you can make a good case that maybe we’re getting a little bit over our skis here and we should probably put some more potential on the resurgence of the inflationary-boom scenario.”
In other corporate news, Carvana Co. gained 40% after the used-car retailer reached a deal to restructure its debt and filed to sell as much as $1 billion in stock. AT&T Inc. rose 8.5% after the telecommunications company reassured investors by saying less than 10% of its nationwide copper-wire telecom network had lead-clad cables.
Key events this week:
- China loan prime rates, Thursday
- US initial jobless claims, existing home sales, Conf. Board leading index, Thursday
- Japan CPI, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.3% as of 8:18 a.m. Tokyo time. The S&P 500 rose 0.2%
- Nasdaq 100 futures fell 0.6%. The Nasdaq 100 was little changed
- Nikkei 225 futures fell 0.4%
- Australia’s S&P/ASX 200 Index futures were little changed
- Hang Seng Index futures rose 0.3%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1204
- The Japanese yen was unchanged at 139.65 per dollar
- The offshore yuan was little changed at 7.2314 per dollar
- The Australian dollar was little changed at $0.6768
Cryptocurrencies
- Bitcoin fell 0.3% to $29,864.79
- Ether fell 0.6% to $1,886.5
Bonds
- The yield on 10-year Treasuries declined four basis points to 3.75%
- Australia’s 10-year yield advanced four basis points to 3.91%
Commodities
- West Texas Intermediate crude fell 0.2% to $75.23 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
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