US stocks rise ahead of Big Tech earnings
US stocks rose in choppy trading on Monday ahead of a week of third-quarter earnings results for Big Tech companies, including Meta, Alphabet and Amazon.
Wall Street’s S&P 500 was up 0.8 per cent by the late morning in New York. The broad-based index last week recorded its biggest five-session gain since June, adding 4.7 per cent, as investors responded to reports that the US Federal Reserve might begin to slow the rate at which it raises interest rates from December.
At the same time, the technology-heavy Nasdaq Composite added 0.1 per cent on Monday, reversing earlier losses.
Those gains came even as US-listed shares in a number of Chinese companies fell sharply. Online shopping app Pinduoduo slid more than 28 per cent, while internet search company Baidu and ecommerce group JD.com both fell roughly 15 per cent.
The declines came after Chinese-listed tech stocks tumbled earlier in the day in the wake of President Xi Jinping securing a third term as party leader and as new data showed the country’s economy fell well short of Beijing’s growth target.
Monday also marked the start of a week dominated by technology earnings in the US, with Apple, Microsoft, Alphabet and Amazon all due to report quarterly figures in the next few days.
UBS analysts said corporate financial statements in the world’s biggest economy had so far been “mixed”, with results broadly in line with the market’s “relatively cautious expectations”.
Europe’s regional Stoxx 600 gauge closed 1.4 per cent higher, while Germany’s Dax rose 1.7 per cent even as S&P Global’s flash eurozone composite purchasing managers’ index, a key measure of business activity in the region, fell to its lowest level since November 2020.
Peter Vanden Houte, chief economist at ING, said Monday’s figure “clearly confirms that the eurozone economy is already in recession”, adding that forward-looking components of the survey implied there was more bad news to come.
In bond markets, the yield on the benchmark 10-year US Treasury note was steady at 4.22 per cent.
In the UK, prices for 10-year gilts climbed, pushing yields down 0.31 percentage points to 3.74 per cent, as Rishi Sunak was confirmed as the country’s next prime minister.
London’s FTSE 100 index rose 0.6 per cent, while sterling slipped 0.1 per cent against the dollar to $1.129. It also slipped 0.3 per cent against the euro on the day to €1.143.
Derek Halpenny, head of research for global markets at MUFG Bank, warned that the pound would almost certainly remain under pressure moving into the final months of the year.
“The removal of political instability in the UK is certainly a positive and could, over the short-term, provide some further support for the pound,” said Halpenny. “However, we suspect gains could be brief and would caution over how much further this news can lift the pound.”
Hong Kong’s Hang Seng index closed 6.4 per cent lower, registering its biggest drop since 2008, while the CSI 300 index of Shanghai and Shenzhen-listed equities fell 2.9 per cent.
Charlie McElligott, a strategist at Nomura, said Xi’s move to consolidate his grip on power, as well as the unexplained eviction of former leader Hu Jintao from the closing session of the 20th congress, had contributed to a “total capitulation” in Chinese equities.