Advertisements
Home News Asian Markets Steady as Wall Street Reacts to Tech Earnings Disappointments

Asian Markets Steady as Wall Street Reacts to Tech Earnings Disappointments

by Barbara

Asian stock markets remained largely subdued following a drop on Wall Street, influenced by a tepid start to the earnings season for major tech firms. Equity indices in Japan saw modest declines, while Chinese markets opened with slight gains. On Tuesday, US stocks fell as investors evaluated the earnings reports of prominent companies such as Tesla Inc. and Alphabet Inc. In Taipei, trading was halted due to Typhoon Gaemi, affecting shares of Taiwan Semiconductor Manufacturing Co.

Investors had hoped that earnings from leading tech companies, known as the “Magnificent Seven,” would sustain the recent rally in global stock markets. However, these expectations fell short. Alphabet’s stock retreated as its CEO indicated that meaningful outcomes from artificial intelligence investments would require time. Meanwhile, Tesla’s shares dropped up to 7% after its profit fell short of forecasts and the company postponed its Robotaxi event to October.

Advertisements

Anthony Saglimbene of Ameriprise remarked, “The high expectations for the ‘Magnificent Seven’ mean these companies must deliver. Their future outlooks will come under intense scrutiny given their elevated valuations.”

Advertisements

The Bloomberg Dollar Spot Index briefly reached its highest level in nearly two weeks before retracing its gains. The yen appreciated for a third consecutive day, as market participants anticipated the Bank of Japan’s policy meeting next week. Although only 30% of analysts expect an interest rate hike on July 31, over 90% perceive a risk of such a move, according to a Bloomberg survey.

Advertisements

China’s market, grappling with economic and geopolitical challenges, is being closely monitored. On July 22, short positions on Chinese stock exchanges decreased to 27.9 billion yuan (approximately $3.8 billion), the lowest level in more than four years, following the implementation of new measures to curb short-selling, reported the China Securities Journal.

Advertisements

Typhoon Gaemi has led to the suspension of Taipei’s $2.4 trillion stock market, with trading in securities, currencies, and fixed income halted on Wednesday. The Philippines also closed its financial markets, schools, and offices as the typhoon affected Manila.

Advertisements

Wall Street’s upbeat earnings would provide a crucial boost for equities, particularly after a strong first half of the year. The market is entering a typically weaker period, with increased volatility anticipated due to the US presidential election. Additionally, United Parcel Service Inc. experienced its most significant drop ever following a profit miss.

The largest US tech companies face challenging comparisons with their exceptional earnings from the previous year. According to Bloomberg Intelligence, profits for this group are expected to rise by 29% in the second quarter compared to the same period last year.

Advertisements

US Treasury 10-year notes remained stable as investors awaited upcoming debt auctions and manufacturing PMI data. Oil prices edged lower amid algorithmic trading and reduced summer liquidity, while gold prices held firm ahead of significant US economic data expected later in the week, which may support arguments for interest rate cuts.

You may also like

Rckir is a comprehensive financial portal. The main columns include foreign exchange wealth management, futures wealth management, gold wealth management, stock wealth management, fund wealth management, insurance wealth management, trust wealth management, wealth management knowledge, etc.

【Contact us: [email protected]

© 2023 Copyright Rckir.com [[email protected]]