23/10 Indices, page-20

Good day to go shopping despite more downside could be on the table.

Red Mondays are always nice to buy.

Asia shares slip on Middle East woes, higher yields

Oct 23, 202315:43 GMT+11

US10Y+1.14%VIX+1.40%3399300−0.73%NI225−0.68%
KEY POINTS:

• Nikkei dips 0.6%, China shares lowest since early 2019
• S&P futures edge higher before raft of tech results
• U.S. GDP data expected to underline economic outperformance

Asian shares hit one-year lows Monday as the risk of a wider conflict in the Middle East clouded sentiment in a week laden with data on U.S. growth and inflation as well as earnings from some of the world's largest tech companies.
Bonds were also under pressure as U.S. 10-year Treasury yields US10Y crept to within a whisker of 5.0%, pushing borrowing costs up across the globe and testing equity valuations.
Washington warned over the weekend of a significant risk to U.S. interests in the Middle East as ally Israel pounded Gaza and clashes on its border with Lebanon intensified.
The European Central Bank and Bank of Canada also hold policy meetings and, while no hikes are expected, investors will be sensitive to guidance on futures moves.
The recent surge in bond yields has tightened monetary conditions without the central banks having to do anything, allowing the Federal Reserve to signal it will likely stay on hold at its policy meeting next week.
Indeed, futures imply around a 70% chance the Fed is done tightening for this cycle and are flirting with the chance of rate cuts from May next year. (FEDWATCH)
The jump in yields has challenged equity valuations and dragged most of the major indices lower last week, while the VIX 'fear index' of U.S. stock market volatility VIX hit its highest since March.
On Monday, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slipped 0.5% to its lowest in almost a year. China's blue chip index 3399300 lost 0.6% to its weakest since early 2019.
Japan's Nikkei NI225 eased 0.6%, as did South Korea's market KOSPI.
EUROSTOXX 50 futures FESX1! and FTSE futures Z1! were flat. Both S&P 500 futures ES1! and Nasdaq futures NQ1! added 0.2%, underpinned by hopes a rush of earnings reports this week will provide some support.
Mega caps Microsoft MSFT, Alphabet GOOG, Amazon AMZN and Meta Platforms META are all reporting. IBM IBM and Intel INTC are also on the docket.
GROWTH SURGE
Profits should be supported by the strength of consumer demand with figures on U.S. gross domestic product this week expected to show annualised growth of a heady 4.2% in the third quarter, and nominal annualised growth possibly as high as 7%.
"At the same time, last quarter's modest rise in hours worked points to a strong productivity gain and surge in corporate profits," wrote JPMorgan chief economist Bruce Kasman in a note.
"As corporate and household income share the benefits of this nominal activity surge, the underlying resilience of the U.S. private sector is being reinforced."

Gold has likewise attracted a safety bid to stand at $1,973 an ounce GOLD, having hit its highest since May last week.
Oil prices gave back some ground in the absence of any disruption to supplies from the Middle East, at least for now.
Brent BRN1! was last down 73 cents at $91.43 a barrel, while U.S. crude CL1! eased 82 cents to $87.26.