(Bloomberg) — Asian stock markets are poised for a mixed development after gains in the world's biggest technology companies led a rally in U.S. stocks.
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Australian and Hong Kong stock futures fell, but Japanese stock futures rose. The S&P index rose, and the tech-heavy Nasdaq 100 index closed up more than 1.5%. A strong economy is expected to drive higher earnings growth for S&P 500 companies, with higher margins from big tech companies expected to be a key driver.
Gold prices hit a new record on Thursday after the latest US inflation report calmed the market, a day after rising gold prices dampened expectations of a Federal Reserve rate cut.
“What's going to drive the market going forward is not going to be Fed rate cuts, but rather earnings,” said George Ball, chairman of Sanders Morris. “Even in this high interest rate environment, corporate profits have been much stronger than people expected.”
In Asia, the yen held firm after falling further on Thursday. Traders will again be keeping an eye on the yen after Japanese authorities warned they would consider all options to counter the yen's weakness against the dollar, which has fallen to its lowest level since 1990.
“We as authorities are always prepared for any situation, whether this involves currency intervention or not,” Masato Kanda, Japan's top monetary authority, told reporters on Thursday morning. Finance Minister Shunichi Suzuki later reiterated that warning, telling reporters that officials were monitoring the currency with “a high sense of crisis.”
Investors will also keep an eye on the offshore yuan after it rose against the US dollar for the fourth time in five trading sessions. The strengthening follows the People's Bank of China's support on Thursday.
U.S. producer prices rose by the largest year-over-year rate in 11 months in March, but certain categories reflected in the Fed's preferred inflation measure were slower. The yield on the 10-year US Treasury note rose 4 basis points to 4.59%. The sale of 30-year bonds attracted lackluster demand. Australian and New Zealand bonds came under selling pressure early Friday.
Larry Tentarelli of Blue Chip Daily Trend Report says the latest PPI readings are constructive, but investors are betting on only one or two rate cuts this year, with the first not expected until the July meeting. They should be prepared that it will not be carried out.
Michael Scholl of Marketfield Asset Management said: “I understand the relief this report has received, but there's nothing very reassuring in it. And all I can say is: “There was no new bad news,'' he said. .
New York Fed President Williams said the central bank was making “significant progress” in rebalancing its inflation and employment goals, but added there was no need to cut rates “in the very short term.” Richmond's Thomas Barkin said the U.S. central bank still had work to do to rein in price pressures and could take its time before cutting interest rates.
Elsewhere in Asia, the central banks of South Korea and Singapore will set monetary policy. Data sets released in this region include Japan's industrial production, India's inflation, and China's trade statistics. Markets are closed in Indonesia, Thailand and Dubai.
profit season
Earnings season got into full swing in the U.S. on Friday, with JPMorgan Chase & Co., Wells Fargo & Citigroup Inc. announcing their results. Earlier, Alphabet Inc. neared the $2 trillion mark, Amazon.com Inc. hit an all-time high and Apple jumped on the news that it plans to overhaul its Mac product line. Morgan Stanley fell after reports that regulators were investigating the company's high-net-worth division, weighing on financial stocks. Globelife Inc. fell after short selling calls.
Wall Street expects S&P 500 member companies' earnings per share to rise 3.8% annually in the first quarter, according to data compiled by Bloomberg Intelligence. If the company performs as planned, the performance could at least help a struggling and still expensive market.
Earnings for the Magnificent Seven, which includes Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Nvidia Corp., Meta Platforms Inc. and Tesla Inc., rose 38% in the first quarter. It is expected that According to BI, quarterly.
“The next challenge is earnings season. Reaction to the news is likely to pave the way for share prices,” said Nationwide's Mark Hackett.
Elsewhere, oil prices rose slightly early Friday after falling on Thursday as US stockpiles swelled and the possibility of an attack on Israel by Iran or its proxies loomed.
This week's main events:
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china trade friday
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University of Michigan Consumer Sentiment, Friday
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Citigroup, JPMorgan and Wells Fargo are scheduled to report earnings on Friday.
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San Francisco Fed President Mary Daley speaks on Friday
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 8:28 a.m. Tokyo time.
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Nasdaq 100 futures little changed
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Nikkei 225 futures rose 0.7%
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Hang Seng futures fell 0.6%.
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S&P/ASX 200 futures down 0.4%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0727.
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The Japanese yen was almost unchanged at 153.22 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2554 yuan to the dollar.
cryptocurrency
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Bitcoin fell 0.8% to $69,929.01.
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Ether fell 0.7% to $3,498.64.
bond
merchandise
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West Texas Intermediate crude rose 0.6% to $85.51 a barrel.
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Spot gold rose 0.2% to $2,376.55 an ounce.
This article was produced in partnership with Bloomberg Automation.
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