(Bloomberg) — European and US equity futures edged higher while Asian stocks fell ahead of US jobs data that will help clarify the Federal Reserve’s path for interest rates.
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Contracts for the Euro Stoxx 50 rose, alongside those for the S&P 500 and Nasdaq 100, helped along by Amazon.com Inc. and Intel Corp. shares that jumped in after-hours trade Thursday on optimistic earnings results.
An Asia equity index fell, on course for its longest weekly losing streak in more than two years. It was dragged by sluggish earnings in the region and tech stock declines that mirrored selling pressure on Wall Street overnight that hit large Silicon Valley companies.
Japanese stocks led losses in the region, while the benchmarks in Australia and South Korea also slipped. Chinese equities rose after improving property sales data and a separate survey revealing the country’s manufacturing activity unexpectedly picked up last month — both of which signaled that Beijing’s recent stimulus measures are beginning to take hold.
“The current weakness is the result of a combination of some negative earnings surprises, especially in large-cap tech, a cautious outlook into year-end and 2025 — all of which comes against a backdrop of high valuation and uncertainty related to next Tuesday’s US election,” said Kieran Calder, head of equity research for Asia at Union Bancaire Privee in Singapore.
Oil extended gains after Axios reported that Iran is planning a major retaliatory strike on Israel through the militias it backs in Iraq. West Texas Intermediate traded above $70 a barrel.
Some of the major non-tech decliners Asia were largely due to tepid earnings results. Li Auto’s shares slumped after the Chinese electric vehicle maker’s fourth-quarter revenue forecast missed estimates. In Australia, Macquarie Group Ltd. fell after earnings results fell short of analyst estimates.
The US elections also continue to weigh on markets in Asia. Australia’s 10-year bond yield rose to an 11-month high amid the uncertainties tied to next week’s match-up between Donald Trump and Kamala Harris.
US Treasuries were steady after minor gains Thursday. But October was the worst month for Treasuries in two years after the heavy selling of the past few weeks that reflected a rethink on US interest rates given signs of resilience in the economy.
An index of dollar strength was little changed after falling Thursday. The yen weakened after climbing as much as 1% against the greenback Thursday. The gains followed comments from Bank of Japan Governor Kazuo Ueda that currency markets have had a major impact on the economy.
The S&P 500 lost 1.9% and the Nasdaq 100 dropped 2.4% Thursday, their worst sessions since early September, reflecting investor unease over the earnings of Microsoft Corp. and Meta Platforms Inc.
“It makes some sense to trim some from those names that have worked so well over the past 12-18 months and look for AI laggards as well as other tech themes like cybersecurity, robotics and automation,” said Michael Landsberg, chief investment officer, Landsberg Bennett Private Wealth Management.
Weekly US jobless claims fell more than expected, according to figures released Thursday, indicating a robust employment market, and less reason for the Federal Reserve to cut rates. Friday’s nonfarm payroll figures are expected to show 100,000 jobs added to the US economy in October.
The Fed’s preferred measure of underlying US inflation posted its biggest monthly gain since April, bolstering the case for a slower pace of interest-rate cuts.
“With the Fed’s attention rotating more toward the full-employment aspect of its dual mandate, we think the steady annual core inflation measure won’t sway the Fed from its rate-cutting path,” Bloomberg economists Stuart Paul and Estelle Ou write in a note.
In commodities, gold steadied, after investors booked profit Thursday following its rally to a fresh record.
Bitcoin sank below $69,000 in Asia on Friday, with its momentum fizzling as pro-crypto Trump’s election odds drop in betting markets.
Key events this week:
China Caixin manufacturing PMI, Friday
US employment, ISM manufacturing, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 2:42 p.m. Tokyo time
Japan’s Topix fell 1.8%
Hong Kong’s Hang Seng rose 0.9%
The Shanghai Composite was little changed
Euro Stoxx 50 futures rose 0.1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.1% to $1.0872
The Japanese yen fell 0.4% to 152.59 per dollar
The offshore yuan fell 0.2% to 7.1327 per dollar
Cryptocurrencies
Bitcoin fell 0.6% to $69,548.2
Ether fell 0.4% to $2,507.32
Bonds
The yield on 10-year Treasuries declined one basis point to 4.27%
Japan’s 10-year yield advanced one basis point to 0.945%
Australia’s 10-year yield advanced three basis points to 4.54%
Commodities
West Texas Intermediate crude rose 2% to $70.64 a barrel
Spot gold rose 0.3% to $2,753.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
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