(Bloomberg) — Stocks in Asia rose after Wall Street closed higher, helped by a rotation from mega-cap technology companies to small-cap companies. Chinese stocks erased their gains after a news conference by finance and housing ministers.
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China’s CSI 300 index stalled after rising as much as 1.3% earlier. A gauge of Chinese property stocks 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 stock benchmarks also pared gains.
Shares in Australia rose, while Japanese shares fluctuated. US stock futures fell after the S&P 500 rose 0.5% on Wednesday. The Russell 2000 index of small caps rose to the highest level in nearly three years, while the Nasdaq 100 lagged behind, rising just 0.1%.
The focus is expected to be on China, with data due Friday expected to show the economy expanded 4.5% in the third quarter from a year earlier, according to economists surveyed by Bloomberg. That would mark its weakest pace in six quarters.
Chinese President Xi Jinping has asked government officials to make every effort in the final quarter to help the country meet its annual growth target of around 5%. However, after a series of press conferences this month in which authorities offered no details on new stimulus, fears are now growing that the 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, said on Bloomberg Television. “Right now, the Chinese economy is on its last legs, but to revive growth, they really need to revive confidence,” he said.
Elsewhere, Australian bond yields rose after the country’s unemployment rate fell to 4.1% in September; Economists surveyed by Bloomberg anticipated it would remain stable. The 10-year Treasury yield rose 4% and the dollar index remained near its highest levels since early August.
The yen strengthened after falling against the dollar in the previous session, as Japanese exports suffered a surprise drop in September.
Taiwan Semiconductor Manufacturing Co.’s earnings will be closely watched Thursday for signs of slowing chip demand, after ASML Holding NV offered surprisingly austere order numbers and cut its 2025 revenue forecast earlier in the week. .
U.S. small-cap earnings on Wednesday signaled that investors are shifting away from the world’s largest technology companies, which have soared on the rise of artificial intelligence, toward other stocks benefiting from benign economic conditions.
“Investors may be looking to move away from large technology companies, which are widely owned and may have fewer clear catalysts going forward,” said TradeStation’s David Russell. “With the election approaching and the economy regaining its footing, the long-awaited rotation from megacaps to everything else could finally be at hand.”
US earnings
Traders also continued to analyze a series of US corporate earnings. Morgan Stanley rose 6.5% as traders and bankers joined the rest of their Wall Street rivals in posting better-than-expected revenue, driving a 32% profit rise for the third quarter. United Airlines Holdings Inc. jumped 12% as earnings beat estimates.
The S&P 500 has already set 46 closing records this year and, according to Goldman Sachs Group Inc.’s trading desk, that rally is poised to extend into the final months of 2024.
Scott Rubner, managing director of global markets and tactical specialist at the bank, estimates that the US equity benchmark may end the year “well above 6,000.” Based on their calculations of data dating back to 1928, the historical median 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 called off and a year-end rally is starting to resonate with clients moving from left-tail to right-tail coverage as institutional investors are forced into the market in this time,” Rubner wrote in a note to clients Tuesday. Professional investors are increasingly concerned about substantially underperforming their benchmark indices, he added.
In commodities, West Texas Intermediate rose after falling for the fourth consecutive day on Wednesday. Gold won for the third day. Bitcoin was little changed on Thursday after rising 1.7% to hit the highest level since July on Wednesday.
This week’s key events:
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ECB rate decision, Thursday
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US retail sales, jobless claims and industrial production, Thursday
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Federal Reserve’s Austan Goolsbee speaks Thursday
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China GDP, Friday
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US Housing Starts, Friday
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Federal Reserve’s Christopher Waller and Neel Kashkari speak Friday
Some of the main movements in the markets:
Stocks
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S&P 500 futures fell 0.2% at 11:52 a.m. Tokyo time
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Nasdaq 100 futures fell 0.2%
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Japan’s Topix barely 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 hardly changed
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Euro Stoxx 50 futures fell 0.1%
Coins
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Bloomberg Dollar Spot Index 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.
Captivity
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 the help of Abhishek Vishnoi.
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