(Bloomberg) — Asian shares rose Tuesday, led by gains on Wall Street as U.S. stocks extended their rally and the sale of $16 billion of 20-year Treasuries attracted bond buyers.
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Technology stocks were among the outperformers, while South Korean and Australian benchmarks also finished higher. China shares rose after the Golden Dragon index of US-listed Chinese companies rose more than 3.5%. U.S. contracts rose after the S&P 500 posted its strongest close since August and the Nasdaq 100 hit a 22-month high.
Treasuries maintained their gains in early Asia trading after a strong 20-year auction in the previous session. Shortly after the auction results, US 10-year yields reversed course and fell to around 4.4% on Monday, sending the dollar to an 11-week low. The greenback fell against all its Group-of-10 peers on Tuesday on bets that US rates may have peaked, while the offshore yuan strengthened above a daily fixing for the first time since July.
Richard Franulovich, head of FX strategy at Westpac Banking Corp., told Bloomberg Television that the “mini” bearish trend in the dollar has little further to go.
Due to weak dollar, Yen is moving towards gains for the fourth day.
Bonds and shares of Chinese developers rose after Bloomberg News reported late Monday that regulators were drawing up a list of 50 developers eligible for different types of financing.
Longfor Group Holdings Ltd.’s 3.85% notes due 2032 rose 4.2 cents to 42 cents on Monday, while the company’s shares rose 12%. Cezanne Group Ltd.’s 4.8% bonds due 2024 rose 3.4 cents to 35.4 cents, both set for their biggest gains in nearly two weeks.
More Clues to China’s Reforms Baidu Inc. as well as Kuaishou Technology which is in the pipeline to report results on Tuesday. Estimates suggest Baidu will likely post a 5.1% rise in revenue, while Kuaishou could report sequentially less-changed earnings as improvements in content algorithms and e-commerce sales were offset by weaker live-streaming revenue. .
In the artificial intelligence sector, OpenAI investors are still trying to lure co-founder Sam Altman back into a leadership role at the ChatGPIT creator. Earlier, Microsoft Corp had reached new heights after appointing Altman and Greg Brockman to lead its research team. In late US trading, Zoom Video Communications Inc rose on better-than-expected sales, while Nvidia Corp will report quarterly results on Tuesday.
attractive yield
Traders are also keeping an eye on Treasury sales, especially after the US recently offered unusually large premiums for selling 30-year securities. Those auctions are having a growing impact on stocks, underscoring how the recent trajectory of interest rates is affecting the market. The 20-year bond yielded 4.78% at the auction, compared with the pre-sale level of 4.79%.
After a gap of more than three decades, the Treasury revived 20-year bonds in May 2020. Before Monday’s auction, it had not sold securities during Thanksgiving week. They have traded at a discount to other long-term maturities – leading to a degree of apprehension ahead of the sell-off.
According to Principal Asset Management, “Treasuries offer extremely attractive returns.” “And while the potential for capital appreciation may be limited in the event of an imminent economic recession, the assurance of stable income from Treasuries makes them a solid choice for investors prioritizing stability in an uncertain 2024.”
Meanwhile, the S&P 500 is set to surge toward its all-time high early next year, pull back in mid-year and then surge higher again, according to strategists at Societe Generale SA.
“The S&P 500 should be in ‘buy-the-dip’ territory as earnings’ leading indicators continue to improve,” Manish Kabra wrote. “Nonetheless, the journey to year-end should not be too easy,” he said, citing the economic slowdown, impending credit selloff and ongoing quantitative tightening as obstacles traders still face.
Elsewhere, oil rose for two days amid speculation that OPEC+ could extend production curbs when members gather this coming weekend.
Major events of this week:
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ECB President Christine Lagarde and German Finance Minister Christian Lindner speak on Tuesday
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Sales of existing homes in America, Tuesday
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FOMC releases minutes of November 1 policy meeting on Tuesday
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nvidia earnings tuesday
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Canada update on the government’s fiscal and economic outlook, Tuesday
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Eurozone consumer confidence, Wednesday
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US Initial Jobless Claims, University of Michigan Consumer Sentiment, Durable Goods, Wednesday
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Bank of Canada Governor Tiff Macklem speaking on Wednesday
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Eurozone S&P Global Manufacturing and Services PMI, Thursday
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Thanksgiving Holiday – US Markets Closed – Thursday
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The ECB published accounts of its October policy meeting on Thursday
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Germany IFO trading climate, Friday
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US S&P Global Manufacturing PMI, Friday
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Black Friday, the traditional start of the American holiday shopping season
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ECB’s Christine Lagarde speaks, Friday
Some key movements in the markets:
shares
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S&P 500 futures were little changed as of 10:22 a.m. Tokyo time
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Nikkei 225 futures (OSE) fell 0.2%
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Japan’s Topix fell 0.7%
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Australia’s S&P/ASX 200 rose 0.1%
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Hong Kong’s Hang Seng rose 0.9%
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Shanghai Composite rose 0.5%
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Euro Stoxx 50 futures rose 0.1%
currencies
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Bloomberg dollar spot index fell 0.1%
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The euro rose 0.1% to $1.0952
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The Japanese yen rose 0.2% to 148.09 per dollar
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The offshore yuan rose 0.4% to 7.1419 per dollar
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Australian dollar rose 0.2% to $0.6572
cryptocurrency
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Bitcoin was little changed at $37,444.64
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Ether was little changed at $2,024.79
bond
Goods
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West Texas Intermediate crude fell 0.3% to $77.61 a barrel
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Spot gold rose 0.6% to $1,989.22 an ounce
This story was generated with the assistance of Bloomberg Automation.
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Source: ca.finance.yahoo.com
