Asian stocks gain as commodities rise: Markets wrap

(Bloomberg) — Asian stocks caught their breath Tuesday after seven days of gains and with the commodity gauge hitting a 15-month high. Traders’ focus turns to chip maker Nvidia Corp’s earnings later in the week.

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Japanese stocks rose, while South Korean stocks fell. The MSCI All Country Index – which posted an eight-day winning streak – was little changed in early Asian trading.

The Bloomberg Commodity Index hit its highest level since January 2023 on Monday as copper and gold hovered near record levels, and wheat prices rose.

The S&P 500 closed near all-time highs, and Nvidia — the last of the so-called Magnificent Seven companies to report earnings this season and one of the biggest companies fueling the artificial intelligence craze — rose at the call of bullish analysts. Investors are awaiting evidence of rising demand for its chips.

“For the market to maintain momentum this week, it may only be down to one stock – Nvidia,” said Jay Woods of Freedom Capital Markets. “The hype around this earnings event is sure to be the talk of the trading desks and financial media all week.”

In Asia, China’s economic difficulties remain in the spotlight, with new data showing little sign of a turnaround in the debt-laden real estate sector. Local governments collected the least revenue in eight years through land sales last month, showing the financial pressures facing those authorities that rely on these revenues for a large portion of their total income.

US bond futures fell as Treasury yields closed higher during the overnight session amid a crowded list of corporate issuances. Australian bonds fell ahead of the release of Reserve Bank of Australia meeting minutes.

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Meanwhile, the S&P 500 has set several records in 2024 as US stocks have risen $12 trillion since late October. Part of that is hopes for a soft landing with the economy remaining fairly strong while inflation cools, which is motivating bets that the Fed will cut interest rates this year.

Elsewhere, commodity traders will be looking to see if the rallies that saw both copper and gold rise to all-time highs on Monday can be sustained. Brent crude hovered near $84 a barrel after recording its first weekly advance this month, while West Texas Intermediate crude settled near $80.

Main events this week:

  • The Fed’s Thomas Barkin, Christopher Waller, John Williams, Raphael Bostic, Susan Collins and Loretta Mester speak on Tuesday.

  • US Existing Home Sales, Wednesday

  • Fed Minutes, Wednesday

  • Nvidia earnings Wednesday

  • Eurozone Global Services Purchasing Managers’ Index (PMI), S&P Global Manufacturing Index, Consumer Confidence, Thursday

  • G7 financial meeting in Stresa, Italy, May 23-25

  • US new home sales and initial unemployment claims, Thursday

  • The Fed’s Rafael Bostic speaks Thursday

  • US Durable Goods, University of Michigan Consumer Confidence, Friday

  • Fed Governor Christopher Waller speaks on Friday

Some key movements in the markets:

Stores

  • S&P 500 futures were little changed as of 9:07 a.m. Tokyo time

  • Hang Seng futures fell 0.7%

  • Japan’s Topix index rose 0.3%.

  • Australia’s S&P/ASX 200 index was little changed

  • Euro Stoxx 50 futures rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • There was little change in the euro at $1.0859

  • There was little change in the Japanese yen at 156.38 to the dollar

  • There was little change in the yuan in external transactions at 7.2462 to the dollar

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Digital currencies

  • Bitcoin rose 2.6% to $71,334.09

  • Ether rose 5.3% to $3,686.4

Bonds

Goods

This story was produced with assistance from Bloomberg Automation.

–With the help of Rita Nazareth.

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