Shares cautious in Asia as earnings loom, oil slips
SPY•Asian shares were cautious as investors awaited earnings, while Brent fell 1.1% to $103.50 a barrel and U.S. crude lost 1.2% to $90.73. S&P 500 futures rose 0.2% as markets also weighed upcoming U.S. inflation data and interest-rate expectations.
1. Markets await earnings
Asian share markets started cautiously on Monday, with South Korean stocks down 1.1% and MSCI’s broadest index of Asia-Pacific shares outside Japan little changed. S&P 500 futures edged up 0.2% and Nasdaq futures rose 0.5%. Major U.S. banks are due to begin reporting earnings on Tuesday; S&P 500 earnings are expected to have risen more than 30% in the third quarter, with most of the increase coming from technology.
2. Oil and inflation risks
Brent futures slipped 1.1% to $103.50 a barrel, while U.S. crude futures fell 1.2% to $90.73. The article cited uncertainty around a proposed energy ceasefire between Russia and Ukraine and strikes on shipping and airports in the Gulf. U.S. consumer prices are expected to rise 0.6% in the month and 3.7% year over year, while core inflation is forecast at 0.2% monthly and 2.5% annually.
3. Rate expectations shift
Treasury yields reached 24-year highs the previous week, and markets priced an 18% chance of a Federal Reserve rate increase this month and an 85% chance of one in December. Investors were also wagering on rate hikes in the EU, Japan and UK before year-end.
