August 7, 2022

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Asian stocks were mixed, US futures rose, boosted by corporate reports

Asian stocks were mixed, US futures rose, boosted by corporate reports

Asian stocks were mixed and US futures rose on Wednesday after strong earnings from Alphabet, and an optimistic view from Microsoft Corp. (MSFT) Help calm investor anxiety a bit.

The high-tech Nasdaq 100 contracts rose about 1.5%, while the S&P 500 contracts rose more than 0.5%. the giant Technology Microsoft leaped into expanded operations in New York thanks to strong sales forecasts, while Alphabet returns Investors’ worst fears subsided.

However, markets remain nervous ahead of the long-awaited interest rate hike from the US Federal Reserve, Part of a global wave of monetary tightening to quell inflation that is fueling fears about a global economic slowdown.

Stocks in Japan, South Korea and Australia were flat. The US stock market closed lower on Tuesday before corporate reports boosted morale after the bell rang.

Treasury yields were little changed as traders braced for a widely expected 75 basis point rise from the Federal Reserve on Wednesday. The dollar fell, oil hovered around $96 a barrel, and bitcoin reached above $21,000.

An expected move from the Fed to deal with price pressures would bolster a combined 150 basis point increase in June and July, the highest rate hike since the 1980s, when then-central bank chief Paul Volcker was suffering from high inflation.

The main question is whether current Fed Chairman Jerome Powell’s policy signals validate or refute the bets. This project cut the top federal funds rate by 3.4% around the end of the year and cuts in 2023 to support an economy at risk of recession.

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“The Federal Reserve has not taken a neutral stance yet,” Jason England, global bond portfolio manager at Janus Henderson Investors, said on Bloomberg TV. “I think it’s a little too early for them to really start to ease or start to see the cuts reduced.”

IMF warning

Monetary policy tightening, energy problems in Europe amid the Russian invasion of Ukraine and the real estate sector in China and challenges from Covid-19, are among the risks casting a shadow on the global outlook. International Monetary Fund (IMF) warned that the global economy It could soon be on the verge of a complete recession.

US corporate earnings offer a glimmer of hope: More than three-quarters of companies that have reported so far have either exceeded expectations or met expectations. But there are questions about how long they will be able to withstand the economic challenges.

“Inflation is hurting business and the question is whether these policy rate increases will do anything to ease the pain,” Nancy Davis, founder of Quadratic Capital Management, said on Bloomberg Television.

on the other side, President Joe Biden will speak with Chinese leader Xi Jinping on Thursdays amid new tensions over Taiwan. The White House is also considering raising some tariffs on Chinese imports to curb inflation.

Some of the main events to watch this week:

  • Apple, Amazon and Meta earnings will be published this week
  • Wednesday Fed Policy Decision Brief
  • Australian CPI Wednesday
  • US GDP, Thursday
  • Eurozone CPI on Friday
  • US personal consumption expenditures deflator, personal income, consumer confidence from the University of Michigan, Friday
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Some of the main movements in the markets:

  • S&P 500 futures rose 0.8% at 9:21 am in Tokyo. The S&P 500 is down 1.2%.
  • Nasdaq 100 futures rose 1.4%. The Nasdaq 100 is down 2%.
  • Japan’s Topix fell 0.1%.
  • Australia’s S&P/ASX 200 Index is up 0.2%
  • South Korea’s Kospi fell 0.2%.