Asian stock markets are set to open with mixed sentiments following a surge led by major technology firms in the United States, which contributed to a rebound in US equities.
Futures in Australia and Hong Kong saw declines, whereas Japanese shares are poised for gains. The advance in the S&P index and a significant 1.5% rise in the Nasdaq 100 were noted, driven by expectations of a robust economy bolstering S&P 500 companies' profit growth, with significant contributions from large technology corporations.
Gold prices reached new heights after the latest US inflation data provided some stability to the markets, following a day of heightened concerns over inflation that dampened expectations for Federal Reserve rate cuts.
George Ball, chairman of Sanders Morris, highlighted that market dynamics would be influenced more by earnings than Federal Reserve rate adjustments. He pointed out that corporate earnings are proving to be stronger than anticipated, even in a high-interest-rate environment.
In currency news, the yen held steady amid ongoing weakness, with Japanese officials signaling readiness to consider measures to address the yen's decline to its lowest level against the dollar since 1990.
The US saw producer prices in March increase at the highest rate in 11 months. However, aspects critical to the Fed's inflation measure showed more subdued increases. This development comes alongside a modest demand observed in a recent 30-year bond sale.
Market analysts, including Larry Tentarelli from Blue Chip Daily Trend Report, suggest investors should brace for fewer rate cuts this year, potentially only one or two, with the earliest adjustments possibly not occurring until the July meeting.
Fed Bank of New York President John Williams and his Richmond counterpart Thomas Barkin shared insights on the central bank's progress towards balancing inflation and employment goals, indicating a cautious approach before any rate cuts.
Monetary policy decisions from the central banks of South Korea and Singapore are anticipated, along with key economic data releases across Asia, including industrial production in Japan, inflation in India, and China's trade figures. Note that markets will be closed in Indonesia, Thailand, and Dubai.
The upcoming earnings season in the US is set to commence with reports from JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc. This follows significant movements in the market, including Alphabet Inc. nearing the $2 trillion mark, Amazon.com Inc. reaching record highs, and Apple Inc. announcing plans to revamp its Mac line with AI-focused M4 chips. Meanwhile, financial stocks such as Morgan Stanley faced pressure, and Globe Life Inc. experienced a decline following a short-seller report.
Wall Street anticipates S&P 500 companies to exhibit a 3.8% annual growth in earnings per share for the first quarter. The performance of the "Magnificent Seven" tech giants is expected to play a crucial role, potentially supporting the market amidst challenges.
Oil prices adjusted after a previous increase, affected by growing US stockpiles which overshadowed concerns over potential attacks on Israel by Iran or its proxies.
Key events to watch include China's trade data, US University of Michigan consumer sentiment, and earnings reports from Citigroup, JPMorgan, and Wells Fargo, along with a speech by San Francisco Fed President Mary Daly.
