Asian stock markets today began Monday's session on a guarded note, according to Business Recorder. Company results are about to test very rich prices for technology shares, and crude swung after attacks on vessels and airports around the Gulf. Volumes were light: Tokyo was closed, and the United States had only a shortened session.
Shares in South Korea lost 1.1 percent. The MSCI gauge, a broad benchmark for Asia-Pacific equities with Japan left out, barely moved. Futures linked to Wall Street were firmer, with the S&P 500 contract up 0.2 percent and the Nasdaq contract up 0.5 percent. In Europe, the EUROSTOXX 50 and Germany's DAX contracts each rose 0.4 percent, and Britain's FTSE contract rose 0.3 percent.
Crude eases after Gulf attacks
Brent, the international oil benchmark, first moved up and then fell by 1.1 percent, leaving it at $103.50 per barrel, under a recent high of $109.97. US crude stood at $90.73 per barrel, down 1.2 percent. For readers tracking oil price news today, those are the levels Business Recorder reported from Sydney; the piece does not give a new Pakistani pump price.
There is still no confirmation of a claim by US President Donald Trump that Russia and Ukraine had agreed an energy truce. Lawmakers from both major parties in the US Senate have also attacked his idea that Russia should sell more diesel, arguing the plan may be unlawful.
Earnings, borrowing and US inflation
Large American banks start publishing figures on Tuesday. LSEG IBES expects third-quarter profits for the S&P 500 to climb by over 30 percent, with technology making up most of that gain. AMP economist My Bui said the entire rise in the S&P 500 from the middle of September had come from tech firms. Investors, Bui said, now want extra yield before they will finance heavy artificial-intelligence borrowing.
A US gauge that prices insurance against default on investment-grade company debt has jumped to its dearest point since fighting with Iran began. Bui said bigger gaps between yields show doubts that AI income can match dearer credit. Selling bonds to pay for AI equipment, together with wider gaps on riskier debt, will make it more expensive to replace loans as they fall due over coming years, the economist added.
Heavy company borrowing has also weighed on government bond markets, and US Treasury yields hit a peak not seen for 24 years last week, which increases the rate used to value future profits. This week brings US figures on shop sales and on prices paid by consumers and by producers. Dearer energy is forecast to lift the monthly consumer-price index by 0.6 percent and the yearly pace to 3.7 percent, while the core reading is expected to be milder, at 0.2 percent for the month and 2.5 percent for the year.
JPMorgan's Bruce Kasman, who heads global economics, said oil is still above the bank's earlier assumption because freight has climbed sharply and refined fuels cost even more. Inflation signals, he said, point to a strong rebound in the headline rate that would cut what households can buy, and to a firmer core rate that would keep central banks watching possible increases soon.
Futures pricing puts at 18 percent the probability that the Federal Reserve, the US central bank, lifts rates during this month, and at 85 percent the probability of a December increase. Bets also lean toward higher rates in Europe, Japan and Britain before the year is out.
Dollar, yen and gold
The euro stood at $1.1201 after five weekly losses in a row, with concern focused on European budget shortfalls. The dollar index, a basket measure of the US currency, was at 102.25, near its firmest level in 17 months, but it has stopped climbing versus the yen at 158.15, where the risk of dollar sales by Japan is discouraging speculative bets for the moment. Gold traded at $4,206 per ounce, higher by 0.3 percent, following a recovery of over 1 percent the week before.
Asian stock markets today will take their next cue from those bank results and from the US inflation releases. A further slide in crude would ease one source of price pressure; a renewed jump would do the opposite for countries that import fuel, including Pakistan.
