(Bloomberg) — European stocks were set for modest gains as traders await Nvidia Corp.’s results for cues on the expansion momentum of artificial-intelligence related stocks. Asian equities traded inside narrow ranges amid weak corporate earnings in China.
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Euro Stoxx 50 futures rose 0.1%, indicating a muted start for the shares within the region, while contracts for US stocks were little modified in Asian trading.
Chinese stocks in Hong Kong fell as much as 1.6%, while those within the mainland declined to their lowest since early February. Bottled water maker Nongfu Spring Co. shares plunged as much as 13% after posting the slowest half-year profit growth in 4 years, becoming the newest company to issue disappointing results.
“Thus far we’re still seeing rather more downgrades than upgrades” in Chinese earnings, Winnie Wu, a China equity strategist at Bank of America Corp., told Bloomberg TV. Web corporations are outperforming other sectors in beating earnings expectations, but materials, tech, builders, auto and other industries pose significant downside risks, she said.
Most major benchmarks in Asia were within the red, with South Korea and Hong Kong seeing losses. Two-year Treasury yields, that are more sensitive to interest-rate policy, fell three basis points.
Weak sentiment toward China reemerged following sluggish outlook guidance earlier this week from e-commerce firm PDD Holdings Inc. The drum beat of stuttering growth has continued through the commentary of other corporations.
ANTA Sports Products Ltd. on Tuesday also lowered its full-year sales guidance for considered one of its core brands amid expectations that it might need handy out more discounts to woo buyers within the country. Meanwhile, Australia’s Fortescue Ltd. reported full-year profit that missed analyst forecasts, partly on account of a slowdown in iron demand from biggest customer China.
Cnooc Ltd., BYD Co. and Meituan are all set to report on Wednesday. Later within the US, investors can be searching for any clues on whether the artificial-intelligence euphoria has more room to run, with the world’s currently most influential stock, Nvidia, set to report earnings.
“We’re seeing a weaker showing in Asia today, potentially because the lead-up to Nvidia’s results tonight may limit risk-taking,” Jun Rong Yeap, a market strategist with IG Asia Pte., said. “Nvidia’s results can be looked upon as a make-or-break moment for global markets, given the acute optimism priced around AI stocks over the past yr.”
The yen prolonged losses to 0.4% against the dollar, following comments from Bank of Japan’s Deputy Governor Ryozo Himino. The BOJ will raise rates of interest so long as inflation moves in keeping with the bank’s view, and it must monitor developments with “utmost vigilance,” Himino said.
Seven & i Holdings Co. shares slipped after the operator of 7-Eleven stores sought a national security-related designation from authorities in a move which will raise potential hurdles for a takeover. Its application got here after Alimentation Couche-Tard Inc. approached the corporate last week.
Meanwhile, Japan issued its highest emergency alert as Typhoon Shanshan barrels toward the southern island of Kyushu.
In other Asian corporate developments, HSBC Holdings Plc’s shares rose in Hong Kong to outperform the benchmark, after Bloomberg reported that Europe’s largest bank is considering plans that would remove layers of middle management.
Warren Buffett’s Berkshire Hathaway Inc. sold a further $982 million in Bank of America shares, based on a regulatory filing.
Bitcoin fell below the $60,000 level early Wednesday as a part of a broad crypto market retreat that included a pointy drop in second-largest token Ether.
Oil was regular after sliding within the previous session to finish a three-day rally. Gold retreated after a three-day advance that’s taken it closer to its all-time high.
Nvidia Earnings
Investors are gearing up for large swings in Nvidia’s shares after the $3.2 trillion company reports. Trading in the choices market implies an almost 10% move in either direction on the day following the outcomes. The stock has rallied about 160% this yr and 1,000% from its October 2022 bear-market low.
Analysts, on average, are predicting that the enormous chipmaker will project revenue growth of greater than 70% for the present quarter. Some are estimating a fair larger surge. Nvidia’s results and forecast also will function a barometer for AI spending across much of the technology industry.
Key events this week:
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Nvidia earnings, Wednesday
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Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
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Eurozone consumer confidence, Thursday
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US GDP, initial jobless claims, Thursday
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Fed’s Raphael Bostic speaks, Thursday
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Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
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Eurozone CPI, unemployment, Friday
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US personal income, spending, PCE; consumer sentiment, Friday
A number of the important moves in markets:
Stocks
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S&P 500 futures were little modified as of two:32 p.m. Tokyo time
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Nasdaq 100 futures fell 0.1%
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Japan’s Topix rose 0.2%
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Australia’s S&P/ASX 200 fell 0.3%
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Hong Kong’s Hang Seng fell 1.1%
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The Shanghai Composite fell 0.6%
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Euro Stoxx 50 futures were little modified
Currencies
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The Bloomberg Dollar Spot Index rose 0.3%
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The euro fell 0.4% to $1.1143
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The Japanese yen fell 0.4% to 144.47 per dollar
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The offshore yuan fell 0.2% to 7.1357 per dollar
Cryptocurrencies
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Bitcoin fell 3.9% to $59,413.49
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Ether fell 4% to $2,478.98
Bonds
Commodities
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West Texas Intermediate crude fell 0.1% to $75.43 a barrel
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Spot gold fell 0.7% to $2,507.33 an oz.
This story was produced with the help of Bloomberg Automation.
–With assistance from Abhishek Vishnoi.
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