(Bloomberg) — Stocks in Asia rose after Wall Street closed higher, helped by a rotation from mega-cap technology to small-cap companies. Chinese shares wiped out their gains after a press conference by the finance and housing ministers.
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China’s CSI 300 index flattened after previously rising 1.3%. A gauge for Chinese real estate shares extended losses. China said it will expand a program to support “white list” projects to 4 trillion yuan ($562 billion), from about 2.23 trillion yuan already deployed. Hong Kong equity benchmarks also suffered a decline in earnings.
Shares in Australia rose, while Japanese shares fluctuated. U.S. stock futures edged lower after the S&P 500 rose 0.5% on Wednesday. The Russell 2000 small-cap index rose to its highest level in nearly three years, while the Nasdaq 100 lagged behind, rising just 0.1%.
The focus on China is expected to continue, with the economy expected to have grown 4.5% in the third quarter from a year ago, according to figures out Friday, according to economists polled by Bloomberg. That would be the weakest pace in six quarters.
Chinese President Xi Jinping has called on government officials to make every effort in the final quarter to help the country reach its annual growth target of around 5%. But after a series of press conferences this month in which policymakers gave no details on new stimulus measures, fears are now growing that efforts may not be enough to revive growth.
“The challenge right now is that we don’t have a big enough package to get people excited,” Jun Bei Liu, portfolio manager at Tribeca Investment Partners, told Bloomberg Television. “Right now the Chinese economy is at the bottom, but to revive growth they really need to revive confidence,” she said.
Elsewhere, Australian bond yields rose after the unemployment rate fell to 4.1% in September; Economists polled by Bloomberg expected interest rates to remain stable. Ten-year Treasury yields rose 4%, and a dollar index remained at its highest level since early August.
The yen strengthened after falling against the dollar the previous session after Japanese exports suffered a surprise decline in September.
The profits of Taiwan Semiconductor Manufacturing Co. will be closely watched on Thursday for signs of weakening chip demand, after ASML Holding NV offered surprisingly poor order numbers and cut its 2025 revenue forecast earlier this week.
Gains for U.S. small caps on Wednesday signaled that investors are shifting from the world’s largest technology companies, which have soared on the artificial intelligence boom, to other stocks benefiting from favorable economic conditions.
“Investors may want to move away from big tech companies, which are heavily owned and may have less clear catalysts going forward,” says TradeStation’s David Russell. “With the election approaching and the economy rebalancing, the long-awaited rotation from megacaps to everything else could finally happen.”
American profits
Traders also continued to wade through a string of U.S. corporate gains. Morgan Stanley rose 6.5% as traders and bankers joined the rest of their Wall Street rivals in posting better-than-expected earnings, leading to a 32% increase in third-quarter profit. United Airlines Holdings Inc. rose 12% as profits exceeded expectations.
The S&P 500 has already set 46 closing records this year, and according to the trading desk of Goldman Sachs Group Inc. that rally is ready to continue into the final months of 2024.
Scott Rubner, managing director for global markets and tactical specialist at the bank, estimates that the U.S. stock benchmark could end the year “well above 6,000.” According to his calculations using data going back to 1928, the historical median of S&P 500 returns from October 15 to December 31 is 5.17%. In election years, average returns are even higher, just over 7%, implying a year-end level of 6,270.
“The stock market sell-off is being canceled and a year-end rally is beginning to resonate with clients switching from left-wing to right-wing hedging as institutional investors are now forced into the market,” Rubner wrote in a article. note for customers Tuesday. Professional investors are increasingly concerned about materially underperforming their benchmarks, he added.
In the commodities sector, the West Texas Intermediate rose after falling for a fourth day on Wednesday. Won gold for a third day. Bitcoin was little changed on Thursday after rising 1.7% to hit its highest level since July on Wednesday.
Main events this week:
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ECB interest rate decision, Thursday
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US retail sales, unemployment claims, industrial production, Thursday
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Fed CEO Austan Goolsbee speaks Thursday
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China’s GDP, Friday
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The US housing market starts on Friday
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The Fed’s Christopher Waller and Neel Kashkari will speak Friday
Some of the major moves in the markets:
Stocks
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S&P 500 futures fell 0.2% as of 11:52 a.m. Tokyo time
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Nasdaq 100 futures fell 0.2%
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The Japanese Topix was little changed
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Australia’s S&P/ASX 200 rose 0.6%
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Hong Kong’s Hang Seng rose 0.9%
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The Shanghai Composite had changed little
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Euro Stoxx 50 futures fell 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0861
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The Japanese yen rose 0.2% to 149.33 per dollar
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The offshore yuan was little changed at 7.1323 per dollar
Cryptocurrencies
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Bitcoin fell 0.2% to $67,451.84
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Ether rose 0.2% to $2,622.44
Bonds
Raw materials
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West Texas Intermediate crude rose 0.2% to $70.56 a barrel
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Spot gold rose 0.3% to $2,682.08 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Abhishek Vishnoi.
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