Asian shares largely rose on Monday as China’s leaders convened for a significant meeting anticipated to yield new economic support for the nation. Oil prices also saw an uptick of more than $1 per barrel after OPEC+ announced an extension of production cuts through the end of the year, although no specific rationale was provided for the decision, which comes just ahead of the U.S. presidential election on Tuesday.
In electronic trading on the New York Mercantile Exchange, U.S. benchmark crude oil increased by $1.27 to $70.76 a barrel, while Brent crude, the international standard, gained $1.30, reaching $74.70 a barrel.
Analysts predict that the Standing Committee of China’s National People’s Congress, meeting this week, may approve significant spending initiatives to stimulate the economy. “Markets are buzzing with speculation about a fresh stimulus package, creating high expectations that are difficult to ignore,” said Stephen Innes from SPI Asset Management.
Among the regional stock indices, Hong Kong’s Hang Seng rose 0.1% to close at 20,540.44, while the Shanghai Composite index increased 0.3% to 3,281.76. Markets in Tokyo remained closed for a holiday, but Australia’s S&P/ASX 200 climbed 0.2% to 8,134.60, and South Korea’s Kospi surged 1% to 2,568.85. Taiwan’s Taiex also saw a gain of 0.3%.
In the U.S. market on Friday, stocks were propelled higher by Amazon’s strong earnings report, despite a disappointing jobs report that raised expectations for another interest rate cut. The S&P 500 added 0.4%, closing at 5,728.80, while the Dow Jones Industrial Average increased by 0.7% to 42,052.19. The Nasdaq composite rose 0.8% to 18,239.92.
Amazon’s shares jumped 6.2% after the company reported a larger-than-expected profit for the latest quarter, becoming a significant driver of the S&P 500’s gains. Intel’s stock also surged 7.8% despite posting a larger-than-anticipated loss; however, its revenue exceeded expectations, and it provided an optimistic forecast for the current quarter. Cardinal Health saw a 7% increase after surpassing analysts’ profit and revenue forecasts and raising its earnings guidance for the fiscal year.
These gains helped offset a 1.2% decline in Apple shares, which forecast low to mid-single-digit revenue growth for the crucial holiday quarter, falling short of several analysts’ projections.
In bond markets, Treasury yields rose after a disappointing jobs report revealed that U.S. employers added only 12,000 jobs last month, significantly below the expected 115,000 and down from the 223,000 created in September. A separate report indicated that U.S. manufacturing contracted more than anticipated, a sector significantly impacted by the Federal Reserve’s interest rate policy, which remained at a two-decade high until September.
Wall Street’s consensus anticipates that the Fed will lower its primary interest rate by a quarter percentage point in its upcoming meeting. The two-year Treasury yield, sensitive to Fed expectations, initially dipped following the jobs report but later rose to 4.20% from 4.18% late Thursday. Similarly, the yield on the 10-year Treasury, which factors in broader economic conditions, increased to 4.37% from 4.29%.
Despite the slowdown in the labor market, optimism persists on Wall Street that the economy will avoid a recession, bolstered by anticipated interest rate cuts. The economy has shown resilience, defying initial fears.
In early currency trading on Monday, the dollar dipped to 152.05 Japanese yen, down from 152.42 yen late Friday. The euro also saw a slight decline, trading at $1.0879 compared to $1.0881 the previous day.+
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