Stocks Rise With Futures on Easing Trade Tensions: Markets Wrap
(Bloomberg) — Asian equities headed for a record close as signs of easing trade frictions helped boost sentiment after recent volatility tied to concerns about US regional banks.
MSCI’s regional stock gauge jumped 1.8% and futures indicated gains in the US and Europe. Japanese shares rallied almost 3% and the yen pared its declines on expectations the pro-stimulus Sanae Takaichi will be elected as Japan’s next prime minister. Chinese equities gained as investors looked past data that showed economic growth slowed to the weakest pace in a year.
In other corners of the market, Treasuries edged lower across the curve with the yield on the 10-year rising one basis point to 4.02%. Gold edged up 0.3%, while oil dipped after posting a third weekly decline.
Market sentiment improved as President Donald Trump sought to ease trade tensions with China after markets were rattled on Friday by US bank-credit woes. A new round of US-China trade talks is set for this week with Treasury Secretary Scott Bessent and Vice Premier He Lifeng facing the task of negotiating down new escalatory measures.
“The markets are pricing in that things will de-escalate,” wrote Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “However, the markets are likely to remain jittery until such backdowns are explicitly announced.”
When asked by Fox News on Sunday about his threat to raise the tariff on Chinese goods by 100%, Trump said the levy was “not sustainable,” though “it could stand.” The US will “be fine” with China, he added.
Bessent also had a “frank and detailed” discussion with He and reaffirmed plans to meet in-person next week. Those comments came as Trump expressed optimism that talks with Chinese officials may yield an agreement to defuse the crisis that saw the US leader threaten to drastically hike tariffs.
The remarks signaled an effort by Washington to calm fears of a full-blown trade war with China that could have a seismic effect on the global economy.
“There’s a prevailing belief that US–China trade headlines will remain skewed toward a positive outcome,” Chris Weston, head of research at Pepperstone Group, wrote in a note to clients.
From the delayed US inflation report for September, to a high-level party meeting in China and a busy week of earnings — including Netflix Inc. and Tesla Inc. — it’s a packed week for investors. September’s consumer price index, originally set for Oct. 15, will now come on Friday.
What Bloomberg strategists say…
Government debt globally is poised to gain with uncertainties hanging over the economic outlook. US notes should lead the way with the Federal Reserve widely expected to cut interest rates at next week’s meeting.
— Garfield Reynolds, Markets LIV Team Leader. For Full analysis, click here.
In China, political leaders will begin gathering in Beijing for a four-day meeting, known as its Fourth Plenum, with traders watching for fresh measures to extend China’s strongest equity rally in eight years and shore up the yuan.
While a detailed plan will only be released in March next year, investors will scrutinize the post-meeting readout for any policy signals ahead of the possible meeting between Chinese President Xi Jinping and Trump.
Elsewhere, French bond futures dropped after S&P Global Ratings downgraded France to A+ from AA-, saying the country’s budget uncertainty was “elevated.” France has now lost its double-A rating at two of the three major credit assessors in little more than a month, potentially forcing some funds with ultra-strict investment criteria to sell the country’s bonds.
In geopolitical news, Israel launched strikes against Hamas in Gaza and reportedly suspended all aid shipments on Sunday after blaming Hamas for a lethal Palestinian ambush that left two soldiers dead.
Corporate News:
Kering SA agreed to sell its beauty division to L’Oreal SA as part of a long-term strategic alliance, with Chief Executive Luca de Meo seeking to turn around the French luxury giant’s fortunes. Apple Inc.’s latest generation of iPhones is off to a faster start than usual, with its most basic model surging in popularity. Volkswagen AG Chief Executive Officer Oliver Blume faces a significant reduction in remuneration after ending his additional role as head of Porsche AG, according to Süddeutsche Zeitung. Sany Heavy Industry Co. started taking investor orders to raise as much as HK$12.4 billion ($1.6 billion) in a Hong Kong listing, joining a flood of Chinese companies seeking to capitalize on the Asian financial hub’s hot market. Activist investor Jana Partners has built a stake in Cooper Cos. and plans to push for strategic alternatives, according to the Wall Street Journal. Saudi National Bank reported profit for the third quarter that beat the average analyst estimate. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 1:56 p.m. Tokyo time Japan’s Topix rose 2.1% Australia’s S&P/ASX 200 rose 0.4% Hong Kong’s Hang Seng rose 2.4% The Shanghai Composite rose 0.7% Euro Stoxx 50 futures rose 0.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1673 The Japanese yen was little changed at 150.62 per dollar The offshore yuan was little changed at 7.1249 per dollar Cryptocurrencies
Bitcoin rose 1.4% to $110,481.7 Ether rose 1.1% to $4,048.46 Bonds
The yield on 10-year Treasuries was little changed at 4.02% Japan’s 10-year yield advanced 4.5 basis points to 1.665% Australia’s 10-year yield advanced five basis points to 4.15% Commodities
West Texas Intermediate crude fell 0.3% to $57.35 a barrel Spot gold rose 0.3% to $4,265.97 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Nasteho Said and Matthew Burgess.
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