Asian stock markets showed a mixed performance on Tuesday as investors braced for three days of earnings reports from major technology companies in the United States. The earnings season kicks off with Alphabet, the parent company of Google, reporting later today.
Dollar Remains Steady Ahead of Employment Reports
The U.S. dollar remained close to a three-month high as traders awaited the release of the Job Openings and Labor Turnover Survey (JOLTS) report on Tuesday. This report is one of the Federal Reserve’s preferred indicators of employment. Investors are also anticipating the monthly non-farm payrolls data set to be released on Friday. U.S. Treasury yields have eased from their recent three-month highs.
Yen Stabilizes After Recent Decline
The Japanese yen stabilized after dropping to a three-month low on Monday. The yen’s recent decline followed disappointing results for the ruling coalition in Japan’s weekend elections, raising concerns about the future of the country’s fiscal and monetary policies. Meanwhile, Japan’s Nikkei index rebounded, closing the day up 0.77% after a cautious start, following a 1.82% rally in the previous session.
Mixed Performance in Other Asian Markets
Hong Kong’s Hang Seng Index rose by 0.5%, recovering from earlier gains that reached 1.6%. In contrast, mainland Chinese blue-chip stocks fell by 0.75%, reversing an early rise of 0.68%. Chinese investors are currently focused on an upcoming top leadership meeting for insights into potential stimulus measures from Beijing.
U.S. Market Sentiment and Key Earnings Reports
U.S. S&P 500 futures were flat after the cash index increased by 0.26% overnight. Markets analyst Tony Sycamore from IG commented on the current market sentiment, stating, “The conviction to take these markets higher, we just don’t have that. We’re in a very, very tricky period here. It just doesn’t make sense to be chasing risk at this time.”
This week, a significant portion of the “Magnificent Seven” group of major technology stocks, which have propelled Wall Street to record highs this year, will report their financial results. Key earnings reports are expected from Meta Platforms and Microsoft on Wednesday, followed by Apple and Amazon on Thursday.
Dollar Stays Steady Amid Strong Economic Data
The dollar remained mostly unchanged against a basket of six major currencies, including the yen and euro. The dollar index was at 104.29 after reaching a high of 104.57 overnight, matching levels not seen since July 30. Strong recent U.S. economic data, including signs of a resilient job market, have reduced expectations for the Federal Reserve to ease monetary policy this year, further supporting the dollar.
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