ASX futures were 102 points or 1.62pc higher at 6554 at 7:00am AEDT on Tuesday, indicating a gain at the open. United States stocks began their opening day of the new quarter higher, offering an early sign of relief to investors after a long and punishing run of down days. The Dow Jones Industrial Average rose 2.7 percent. The S&P 500 climbed 2.6 percent and the Nasdaq Composite rose 2.3 percent. The across-the-board gains followed a losing week, month and quarter for stocks, when all three indexes closed at their lowest levels of the year on Friday.
Stocks have plunged throughout much of the first nine months of the year, as central bank policymakers have left no doubt that interest-rate increases and monetary tightening will persist. The Dow crossed into bear market territory last week, a drop of 20% or more from a recent high.
Investors are weighing a mix of factors that have fueled jitters about the global economic backdrop and financial stability. OPEC and its partners are considering a production cut to lift prices. A British economic plan was just behind a selloff in bond markets that rippled back to pension funds.
“There is just so much pressure and so much happening right now,” said Carsten Brzeski, the global head of macro research at ING Groep. “That’s going to come with huge volatility and uncertainty in markets.”
COMMODITIES
Brent crude climbed 4.43% to $US88.91 a barrel, gold added 2.3% to US$1,698.79
In bonds, Australia’s 2-year yield rose to 3.45% and its 10-year yield rose to 3.89% in today’s action. The US 2 Year yield was 4.12% while the 10 year yield was 3.66%. The Australian dollar was fetching 65.09 US cents, compared with 63.99 as at 16:40. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, was down slightly at 103.37.
Asia
The Shanghai Stock Exchange is shuttered this week.
Japanese shares close higher, lifted by gains in semiconductor and auto stocks after sell offs last week on concerns about the global economic outlook. Tokyo Electron rises 4.6% and Toyota Motor adds 3.5%. The Nikkei Stock Average climbs 1.1% to 26215.79. USD/JPY is at 144.89 after reaching 145.00 for the first time since the Japanese government intervened in the market Sept. 22. The two were at 144.72 late on Friday in New York. Investors are now looking at manufacturing sector activity data from the eurozone and the US later in the day. The 10-year Japanese government bond yield drops to 0.240% by half a basis point.
Hong Kong stocks finished lower as the market ran out of puff following an early bounce into positive territory in morning trade. The benchmark Hang Seng Index lost 0.8% to close at 17079.51. Chinese banks were some of the biggest losers, as concerns about investor fears mounted in part on the heels of Beijing’s latest bid to prompt state-owned banks to extend credit support to the real-estate industry. Postal Savings Bank of China fell 10%, while China Merchants Bank declined 2.5% and Harbin Bank lost 2.4%
Europe
[WSJ] European shares gained ground, reversing some of their earlier losses as U.S. stocks bounced back at the start of 4Q; the pan-continental Stoxx Europe 600 added 0.8%, the German DAX rose 0.8%, and the French CAC 40 was up 0.6%.
“Today’s seesaw seems more linked to expectations of record cuts in oil production this week by OPEC+ countries, with signs we could see a cut of more than 1 million barrels a day,” wrote ActivTrades analyst Pierre Veyret.
In London, the FTSE 100 ended the day 0.2% higher, at 6,908.76 points, after bouncing around last week in response to the new United Kingdom plan for sweeping tax cuts to be financed by borrowing. The session’s biggest gainers were BT Group PLC, Fresnillo PLC, B&M European Value Retail SA, which ended up 4.4%, 3.8% and 3.7% higher, respectively. Scottish Mortgage Investment Trust PLC, Endeavour Mining PLC and Haleon PLC, meanwhile, were the index’s leading fallers, finishing down 2.3%, 3.5% and 3%.
North America
U.S. stocks began the new quarter higher, offering a faint sigh of relief to investors after an arduous and punishing stretch of down days. The Dow Jones Industrial Average rose 2.7 percent. The S&P 500 climbed 2.6 percent, and the Nasdaq Composite gained 2.3 percent. The gains were broad-based and followed stocks capping off a losing week, month and quarter on Friday, when all three stock indexes reached their lowest levels of the year.
Stocks have suffered sharp losses in the first nine months of the year, as central bank officials have grown more vocal about their plans to keep raising interest rates and to pare back monetary stimulus. Last week, the Dow plunged into a bear market — a drop of 20% or more from a recent high.
Investors are weighing a mix of factors that have contributed to anxiety about the backdrop for the global economy and financial stability. OPEC and its partners are considering reducing their output to support prices. A U.K. economic plan set off a bond-market selloff that, in turn, swept over pension funds.
“There are a lot of different tensions and crises now coming together,” said Carsten Brzeski, global head of macro research at ING Groep. “That’s creating a huge amount of volatility and uncertainty in markets.”
Yet some investors see more juice in stocks going into the home stretch of the year. “I think the market’s going to end the year higher than it is today,” said Andrew Slimmon, who manages U.S. equities for Morgan Stanley Investment Management.
“Earnings have been good but earnings expectations have been low, and so this has set up very well for equities,” Mr. Slimmon said. He expects to receive some more favorable inflation data since commodity prices have fallen, and stocks have a lengthy history of rising after midterm elections. The Federal Reserve, which has been raising interest rates to try controlling decades-high inflation, would also have room to ease up next year, he said.
“In some stocks, if the Fed were to actually back off at some point, we have issues that are down so much — you could actually have it go the other way,” Mr. Slimmon said.
All 11 sectors in the S&P 500 were trading in positive territory and the energy sector was gaining more than 5%. Marathon Oil surged 10.6 percent. Dominion Energy and ConocoPhillips gained 2.9% and 8%.
Tesla shares fell 8.6 percent after the electric-car maker’s quarterly vehicle deliveries were below analysts’ estimates.
