Asian shares are set for a seventh consecutive month of gains on Friday, after upbeat earnings from Amazon and Apple buoyed Wall Street futures and the dollar hovered near three-month highs on uncertainty over further Federal Reserve rate cuts.
Nasdaq futures jumped 1.2 per cent and S&P 500 futures gained 0.6 per cent as Amazon’s stellar earnings sent its shares up a staggering 13 per cent after the bell, which added more than $US300 billion ($A458 billion) to its market value. Apple also rose 2.3 per cent after its outlook on iPhone sales topped estimates.
That offset the drag from Meta and Microsoft overnight amid worries over their surging AI spending. Six of the “Magnificent Seven” US tech megacaps have now reported and the results have been mixed. Nvidia, the world’s first $US5 ($A7.6) trillion company, is due to report in three weeks.
“Things have gone in reverse, or at least slightly retraced, with earnings this morning from Apple and Amazon … improving sentiment going into Asian trade,” said Kyle Rodda, a senior analyst at Capital.com.
“The markets round out the week on still uncertain footing, although the big events of the week are now in the rear view mirror. The report card … isn’t categorically positive but it isn’t all that bad either.”
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent on Friday, as gains elsewhere were offset by losses in Chinese stocks. The index was poised for a weekly gain of 1.8 per cent and a monthly rise of 4.7 per cent.
Japan’s Nikkei rallied 1.1 per cent on Friday, adding to its weekly and monthly gains to 5.2 per cent and 15.5 per cent, respectively.
Chinese stocks lagged after a dismal reading on China’s factory activity in October weighed on sentiment. The official purchasing managers’ index (PMI) dropped to a six-month low of 49, well below the forecast 49.6.
Chinese blue chips fell 0.4 per cent and Hong Kong’s Hang Seng index slipped 0.3 per cent.
The much-anticipated summit between US President Donald Trump and Chinese President Xi Jinping led to reduced US tariffs on Chinese goods, resumed US soybean purchases by Beijing and continued rare earth exports from China.
However, market reactions have been fairly muted as the meeting was viewed as just a tactical truce, rather than a major reset in bilateral relations.
This week, major central bank meetings have delivered decisions that are largely in line with expectations, with the biggest surprise coming from Federal Reserve Chair Jerome Powell who pushed back against the market’s sanguine view about a rate cut in December.
Treasuries were steady on Friday, but were set for weekly losses. Two-year Treasury yields were flat at 3.6021 per cent, having risen 12 basis points this week already, while the 10-year yield was steady at 4.0931 per cent and up 10 bps for the week.
The rise in yields offered support to the US dollar , which was holding near three-month highs at 99.459 against its major peers, although resistance seems heavy at 99.564 and 100.25.
The euro was last 0.1 per cent firmer at $US1.1572 ($A1.7650) after the European Central Bank kept interest rates unchanged at 2.0 per cent for the third meeting in a row on Thursday and repeated that policy was in a “good place” as economic risks recede.
Oil prices slipped and were headed for a third straight month of declines as a stronger dollar capped commodities gains and rising supply from major producers offset the impact of Western sanctions on Russian exports.
Brent crude futures slipped 0.5 per cent to $US64.67 ($A98.63) a barrel, while US West Texas Intermediate crude was at $US60.22 ($A91.85) a barrel, down 0.6 per cent.
Spot gold prices held a 2.4 per cent overnight gain at $US4,033.48 ($A6,151.88) per ounce but were still down almost 2.0 per cent for the week and well below its record high of $US4,381 ($A6,682) hit just last week.
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