Asian Shares Advance After US Equities Rebound: Markets Wrap

Shares in Asia gained after shares in the US rebounded from their worst week since March, with Wall Street optimism offset by the latest comments from a Federal Reserve official that pointed to more rate hikes to tame inflation.

(Bloomberg) — Shares in Asia gained after shares in the US rebounded from their worst week since March, with Wall Street optimism offset by the latest comments from a Federal Reserve official that pointed to more rate hikes to tame inflation.

Shares rose at the open in Japan, South Korea and Australia, while equity futures for Hong Hong stocks fell. Contracts for US stocks were flat after the S&P 500 on Monday halted a four-day drop and the Dow Jones Industrial Average saw its biggest advance in more than seven weeks. 

Treasuries steadied in early trading hours in Asia after yields on the 10-year on Monday resumed an increase that drove them last week to the highest since November. Fed Governor Michelle Bowman also said Monday that additional hikes “will likely be needed” and that sent yields on the two-year to climb before paring some of its advance.

Bulging sales of Treasuries are about to deliver a major test of investor demand and determine whether a selloff has room to run as the market braces for the biggest round of refunding auctions since last year. The bond market has to absorb a combined $103 billion of 3-, 10- and 30-year auctions before the week is out — up $7 billion from the May slate.

Traders will be monitoring the release of trade balance data from China to gauge recovery in the world’s second-largest economy. Consumer confidence figures from Australia are due later Tuesday as well.

Meanwhile, the release of the consumer price index from the US due later this week will provide investors with clues on the Federal Reserve’s policy outlook. Fed Bank of New York President John Williams cited the necessity to keep policy restrictive “for some time” — while noting rate cuts may be warranted next year if inflation slows. 

Ripple Effects

Morgan Stanley’s Michael Wilson said that Fitch Ratings’ downgrade of US government debt last week and the ensuing selloff in the bond market suggests that “investors should be ready for potential disappointment” on economic and earnings growth.

A clear majority of investors expect a US recession before 2024 is out, leading them to view the current bull market in stocks as ephemeral and to favor long-term US Treasuries. That’s the takeaway from the latest Markets Live Pulse survey, which showed that roughly two-thirds of the 410 respondents anticipate a downturn in the world’s biggest economy by the end of next year.

Survey respondents appear to be looking past the economy’s current resilience and anticipating further damaging ripple effects from the Fed’s cumulative tightening.

“There is no way the Fed can do the level of tightening that it’s done so aggressively and not have some damage,” Kristina Hooper, chief global strategist at Invesco, said on Bloomberg Television. “That’s why I believe it’s going to be a bumpy landing.”

Earnings Focus

Focus returned to company earnings on Monday. Berkshire Hathaway Inc. hit a record as its results beat estimates. Inc. rose after a news report it will meet with the Federal Trade Commission to avoid an antitrust lawsuit. Tesla Inc. slid as its chief financial officer stepped down in a surprise shakeup at Elon Musk’s company. Apple Inc. notched its longest losing streak this year.

In late trading, Beyond Meat Inc. fell as the plant-based burger company said it’s unlikely to hit its goal of becoming cash-flow positive in the second half of the year. Palantir Technologies Inc. climbed after raising its profit forecast and authorizing a $1 billion share buyback. Lucid Group Inc. gained after the maker of luxury electric sedans assured investors it’s on track to its achieve full-year production target.

Elsewhere, West Texas Intermediate traded over $82 a barrel in early Asia trading and gold was little changed.

Key events this week:

  • Japan household spending, Tuesday
  • US wholesale inventories, trade, Tuesday
  • Philadelphia Fed President Patrick Harker speaks, Tuesday
  • China CPI, PPI, money supply, new yuan loans and aggregate financing, Wednesday
  • India rate decision, Thursday
  • US initial jobless claims, CPI, Thursday
  • Atlanta Fed President Raphael Bostic pre-recorded remarks for employment webinar, Thursday
  • UK industrial production, GDP, Friday
  • US University of Michigan consumer sentiment, PPI, Friday

Some of the main moves in markets:


  • S&P 500 futures were little changed as of 9:28 a.m. Tokyo time. The S&P 500 rose 0.9%
  • Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.9%
  • Japan’s Topix rose 0.5%
  • Australia’s S&P/ASX 200 rose 0.4%
  • Euro Stoxx 50 futures rose 0.1%


  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0997
  • The Japanese yen fell 0.2% to 142.77 per dollar
  • The offshore yuan was little changed at 7.2041 per dollar
  • The Australian dollar was little changed at $0.6571


  • Bitcoin was little changed at $29,172.35
  • Ether rose 0.1% to $1,827.31


  • The yield on 10-year Treasuries declined one basis point to 4.08%
  • Japan’s 10-year yield advanced 1.5 basis points to 0.635%
  • Australia’s 10-year yield declined nine basis points to 4.11%


  • West Texas Intermediate crude rose 0.5% to $82.35 a barrel
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

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