Shares in Asia experienced an upward trend on Monday, as leaders in China commenced a significant meeting that is anticipated to yield new initiatives aimed at bolstering the economy of the world’s second-largest country.
In the oil market, prices saw an increase of more than $1 per barrel following the announcement from OPEC+ oil-producing nations regarding an extension of production cuts through the year’s end. No specific rationale was provided for this decision, which comes just ahead of the upcoming U.S. presidential election scheduled for Tuesday.
In electronic trading on the New York Mercantile Exchange, U.S. benchmark crude oil rose by $1.27 to reach $70.76 a barrel, while Brent crude, the international benchmark, climbed by $1.30 to hit $74.70 a barrel.
This week, the Standing Committee of China’s National People’s Congress is convening, with analysts suggesting that the government may unveil substantial spending initiatives to stimulate economic activity. Stephen Innes from SPI Asset Management remarked that “the market buzz is rife with speculation of a new stimulus package, leading to heightened expectations among investors.”
In market performance, Hong Kong’s Hang Seng index ticked up 0.1% to 20,540.44, and the Shanghai Composite index increased by 0.3% to 3,281.76. The Tokyo markets, however, remained closed due to a public holiday.
Australia’s S&P/ASX 200 increased slightly, by 0.2% to 8,134.60, and Seoul’s Kospi saw a substantial rise of 1% to 2,568.85. Taiwan’s Taiex also contributed positively with a 0.3% gain.
On the U.S. front, last Friday, Amazon’s performance significantly uplifted stock indexes, while a weaker-than-expected jobs report cast a shadow over the market, reinforcing expectations for another interest rate cut in the following week. The S&P 500 rose by 0.4% to settle at 5,728.80, partially recovering from its previous losses, which were the worst the index had seen in eight weeks. The Dow Jones Industrial Average gained 0.7% to attain 42,052.19, and the Nasdaq composite rose by 0.8% to reach 18,239.92.
Amazon’s stock surged by 6.2% after posting better-than-anticipated earnings for the recent quarter, leading the upward momentum in the S&P 500. Intel also experienced a significant surge, climbing 7.8% despite reporting a larger-than-expected loss. The company’s revenue surpassed forecasts, and it offered a positive outlook for the upcoming quarter. Cardinal Health was another market highlight, surging 7% after exceeding profit and revenue expectations as well, raising its fiscal year profit forecast in its second quarter.
These gains helped mitigate a 1.2% decline in Apple’s stock, which projected modest revenue growth in the crucial holiday quarter, falling short of several analysts’ predictions.
In terms of Treasury yields, an anticipated report revealed that U.S. employers created only 12,000 new jobs last month, a stark contrast to the anticipated 115,000 and significantly lower than September’s total of 223,000. An additional report indicated a greater-than-expected contraction in U.S. manufacturing last month, an area notably affected by the Federal Reserve’s decision to maintain interest rates at a two-decade high until September.
On Wall Street, the consensus continues to lean toward a quarter-point interest rate cut by the Fed in the upcoming week. Following the jobs report, the yield on the two-year Treasury initially dipped before rising slightly to 4.20% from 4.18% late the previous Thursday. A similar trend was seen in the yield of the 10-year Treasury, which climbed to 4.37%, up from 4.29%.
Despite the slowdown in the job market, Wall Street remains hopeful that the economy will evade a recession, aided in part by upcoming interest rate cuts from the Fed. Overall, the economy has displayed more resilience than initially feared.
In currency exchange rates on Monday morning, the dollar weakened against the Japanese yen, falling to 152.05 from 152.42, while the euro also dropped slightly to $1.0879 from $1.0881.