© Stocksak. FILEPHOTO: Passersby silhouetted as they pass in front an electric stock quote board outside a Tokyo, Japan brokerage on October 18, 2022 REUTERS/Issei Cato
By Jamie McGeever
(Stocksak). – A look at what lies ahead for Asian markets from Jamie McGeever
Bad (economical) news is good news. But good (earnings-related) news is also good.
This is the overall outlook for Wall Street as investors continue to recover some of this year’s losses. U.S. stocks on Monday reacted to steep declines in Asia, particularly China, to extend their bear market rally of two weeks.
The index has recovered about 9% from its Oct.13 low, laughing at rising bond yields. Monday’s gains were achieved despite the recession-territory U.S.PMIs, and a spike of volatility index back above 30,
Investors also have other reasons to be cautious: liquidity concerns and financial stability concerns; political and economic trends in China; Japan’s policy dilemma and FX Market Interventions; British political and market turmoil.
Particularly the news flow from Asia is not conducive towards a risk-on’ trading environment. MSCI Asia ex Japan and China’s benchmarkindices fell to post 2020 lows Monday. The slumped to its lowest point since its inception in 2010.
You wouldn’t place your bets against the divergence between U.S. and Asian stock markets.
The U.S. earnings are a relative bright spot. So far, almost one-fifth of S&P 500 companies have reported. According to Refinitiv data, 75% of those have exceeded expectations.
The Q3 reporting season kicks off this week with results of tech-heavy firms such as Twitter, Microsoft, Alphabet (NASDAQ), Apple (NASDAQ), Meta Platforms, and Amazon.com.
These results could be critical if the Wall Street rebound is going to continue and ripple out to Asia. (Graphic: Tesla (NASDAQ:), Nasdaq & FAANGs, https://fingfx.thomsonreuters.com/gfx/mkt/zjvqjqejypx/FAANGS.jpg)
Tuesday’s key developments could give more direction to the markets
China FDI (September).
South Korea consumer sentiment October
August: U.S. House Prices
U.S. Consumer Confidence (October)
Earnings from the U.S.