“As Asia’s markets open mixed, all eyes are on the tech giants, whose strong rebound signals a potential shift in the global economic landscape.”
Asian equities are expected to have a mixed open on Friday as big tech stocks on Wall Street rallied following solid earnings. US share futures also advanced. The Nasdaq 100 gained in the Asian session after falling 1.9% the previous day. Amazon.com Inc. and Intel Corp. both gained in after-trading hours, leading to gains in US futures and suggesting an early rebound when trading begins on Wall Street. Australian shares edged higher, while futures in Hong Kong rose and those in Japan slipped. The Golden Dragon index, which tracks the largest Chinese firms listed in the US, advanced 0.5%.
Despite the positive performance of big tech stocks, concerns remain about the weaker macroeconomic backdrop and the impact it may have on economically sensitive stocks. Earnings season has not met expectations, and investors are becoming more cautious.
In other news, Treasury yields fell, and the US labor market showed signs of cracking despite strong economic growth. Traders are awaiting the PCE deflator print on Friday to determine whether the Federal Reserve will pause next week. Data suggests there is a roughly one in three chance of another Fed hike in the current tightening cycle.
Geopolitical developments are also being closely monitored, with Israel’s military claiming to have killed Hamas’s deputy head of intelligence and escalating tensions with Iran. Oil prices dropped below $84 a barrel, while gold remained above $1,980 an ounce.
Currency markets saw the dollar giving up earlier gains as Treasury yields fell, while the yen remained steady ahead of Tokyo inflation data. The euro pared losses after the European Central Bank kept rates unchanged.
Looking ahead, key events this week include China industrial profits, Japan Tokyo CPI, US PCE deflator, personal spending and income, University of Michigan consumer sentiment, and Exxon Mobil earnings.
In terms of market movements, S&P 500 futures rose 0.5%, Nasdaq 100 futures rose 0.8%, Hang Seng futures rose 0.6%, and Australia’s S&P/ASX 200 rose 0.4%.
In currencies, the Bloomberg Dollar Spot Index was little changed, the euro was little changed at $1.0564, the Japanese yen was little changed at 150.37 per dollar, the offshore yuan was little changed at 7.3209 per dollar, and the Australian dollar rose 0.1% to $0.6329.
In the cryptocurrency market, Bitcoin rose 0.2% to $34,256.2, and Ether rose 0.6% to $1,808.99.
Overall, the market remains cautious as concerns about the macroeconomic landscape persist. The ECB is expected to lower interest rates due to the deteriorating economic conditions. Traders are awaiting key economic data and geopolitical developments to guide their investment decisions.