Futures for US and European stocks rose as investors awaited earnings from one of the world’s most valuable companies to further gauge hype in artificial-intelligence.
(Bloomberg) — Futures for US and European stocks rose as investors awaited earnings from one of the world’s most valuable companies to further gauge hype in artificial-intelligence.
Contracts for US equities advanced more than 0.3%, while those for Europe climbed 0.2% ahead of Nvidia Corp.’s results, due later Wednesday. The S&P 500 had extended its August slide Tuesday as banks dropped after S&P Global Ratings joined Moody’s Investors Service in cutting some US lenders amid a “tough” climate.
Asian equities traded mixed, with mainland Chinese stocks under pressure again despite fresh signs of an earnings recovery among the country’s tech giants. Shares in Hong Kong, Japan and Australia extended gains from yesterday.
Analysts are predicting that Nvidia’s second-quarter revenue may come in higher than the forecast it gave three months ago. The options market is also bracing for a move of about 10% following the results. With Nvidia accounting for over 3% of the S&P 500, the stock action will possibly have broader implications. The shares briefly touched an all-time high Tuesday.
The release of purchasing managers’ index from the Eurozone and the UK may weigh sentiment as the data is expected to show continued slowing activities amid a high interest rate environment.
Treasuries gained in Asia, with the 10-year paper rising for a second day. Wider markets are also marking time ahead of a speech from Federal Reserve Chair Jerome Powell on Friday. Resilient US economy so far has investors positioning for the Federal Reserve to keep borrowing costs elevated.
As Wednesday’s 20-year Treasury auction approaches and Jackson Hole nears, “we’re open to the interpretation that sellers’ fatigue is beginning to set in,” BMO Capital Markets strategists Ben Jeffery and Ian Lyngen said in a note.
“In the event of a strong bid for either 20s on Wednesday or the 30-year TIPS reopening on Thursday, rates could pull further off the highs and leave a relatively cleaner setup going into Powell’s speech,” they wrote.
The greenback weakened against all Group-of-10 currencies. The offshore yuan advanced after the People’s Bank of China once again maintained support for the currency.
Powell is set to speak Friday at the Kansas City Fed’s Jackson Hole Economic Policy Symposium. Investors will look to the highly anticipated speech for clues on the outlook for interest rates, which the Fed last month lifted to a range of 5.25% to 5.5%, the highest level in 22 years.
“The big narrative is now changing and the big debate is really around how long will we stay at this fairly high level we are now,” Stefanie Holtze-Jen, Asia Pacific chief investment officer at Deutsche Bank International Private Bank, said on Bloomberg Television. “We don’t see any rate cuts before second quarter next year.”
Back in Asia, Baidu Inc. jumped more than 5% after its revenue rose the most in more than a year. The company reported a larger-than-projected jump in sales for the June quarter and its net income rose 43%.
In commodities, both oil and gold edged higher.
Key events this week:
- Eurozone S&P Global Services & Manufacturing PMI, consumer confidence, Wednesday
- UK S&P Global / CIPS UK Manufacturing PMI, Wednesday
- US new home sales, S&P Global Manufacturing PMI, Wednesday
- US initial jobless claims, durable goods, Thursday
- Kansas City Fed’s annual economic policy symposium in Jackson Hole begins, Thursday
- Japan Tokyo CPI, Friday
- US University of Michigan consumer sentiment, Friday
- Fed Chair Jerome Powell, ECB President Christine Lagarde to address Jackson Hole conference, Friday
Some of the main moves in markets:
- S&P 500 futures rose 0.3% as of 6:59 a.m. London time. The S&P 500 fell 0.3%
- Nasdaq 100 futures rose 0.5%. The Nasdaq 100 fell 0.2%
- Japan’s Topix rose 0.5%
- Australia’s S&P/ASX 200 rose 0.5%
- Hong Kong’s Hang Seng rose 1.1%
- The Shanghai Composite fell 0.3%
- Euro Stoxx 50 futures rose 0.3%
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.0862
- The Japanese yen rose 0.2% to 145.67 per dollar
- The offshore yuan rose 0.2% to 7.2901 per dollar
- The Australian dollar rose 0.3% to $0.6441
- The British pound rose 0.2% to $1.2752
- Bitcoin rose 0.7% to $26,030.65
- Ether rose 0.4% to $1,637.21
- The yield on 10-year Treasuries declined two basis points to 4.30%
- Japan’s 10-year yield advanced one basis point to 0.675%
- Australia’s 10-year yield declined four basis points to 4.23%
- West Texas Intermediate crude rose 0.2% to $79.81 a barrel
- Spot gold rose 0.3% to $1,902.82 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller.
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