Stocks Rise on China Data Surprise, Fed Break Talk: Market Conclusion


(Bloomberg) – Stocks in Asia were broadly higher in choppy trade as the House passed a deal to avert a U.S. default and investors weighed the prospect of a pause in bulls Federal Reserve rate this month.

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A gauge of Asian stocks headed for its best day in four weeks as Japanese and Australian stocks rose while those of South Korea dipped slightly.

Benchmarks in China climbed, helped by manufacturing data from Caixin on Thursday which showed an expansion in activity, beating forecasts of a slight contraction. The figures followed official figures on Wednesday which showed a further contraction in activity, weighing on the country’s stock markets.

For the Chinese economy “things aren’t getting worse outside of the growth momentum – but it’s not getting better,” said Wendy Liu, chief equity strategist in Asia and China for JPMorgan Chase & Co. ., in an interview with Bloomberg Television. However, the economy will be “firmly in recovery in the second half”, she added.

U.S. stock futures traded in and out of positive territory after an initial boost after news of the deal passed in the House. The mixed picture suggests investors were paying more attention to Fed officials who backed the possibility of keeping rates unchanged at the next meeting.

Fed Governor Philip Jefferson said the central bank was inclined to hold interest rates steady in June to gauge the economic outlook. His remarks were echoed by Philadelphia Fed President Patrick Harker, who said, “I think we can jump a little for a meeting.”

The S&P 500 closed 0.6% lower on Wednesday, clinging to a slight gain for May that marked three straight monthly advances. The Nasdaq 100 index fell 0.7%, weighed down by a decline in Nvidia Corp shares. after a rapid rally that nearly tripled the stock price this year.

Corporate earnings were once again the focus. Shares of Salesforce Inc. fell about 6% in after-hours trading following a weak sales outlook, while Hewlett Packard Enterprise Co. fell 7.1% on Wednesday on projections of income lower than expected.

Treasuries sold off, largely canceling out a rally on Wednesday. Australian bond yields were moderately higher, as were those in New Zealand. The dollar was in a tight range against most major currencies.

Hopes of a Fed pause were partly dashed after the JOLTS April jobs report showed more than 10 million opens, the highest in three months and above consensus estimates.

Passage of the deal reached by House Speaker Kevin McCarthy and President Joe Biden means the bill will be sent to the Senate days before the default June 5 deadline.

Elsewhere, West Texas Intermediate and Brent crude futures rose after two days of declines. Gold has changed little.

Key events this week:

  • Eurozone HCOB Eurozone manufacturing PMI, CPI, unemployment, Thursday

  • U.S. Construction Spending, Initial Jobless Claims, ISM Manufacturing, Thursday

  • ECB President Christine Lagarde speaks at a conference on Thursday

  • The Fed’s Patrick Harker speaks during a webinar, Thursday

  • U.S. unemployment, nonfarm payrolls, Friday

Some of the major movements in the markets:


  • S&P 500 futures rose 0.1% at 1:31 p.m. Tokyo time. The S&P 500 fell 0.6%

  • Nasdaq 100 futures fell 0.1%. The Nasdaq 100 fell 0.7%

  • Japan’s Topix rose 0.8%

  • Australia’s S&P/ASX 200 rose 0.4%

  • Hong Kong’s Hang Seng rose 0.8%

  • The Shanghai Composite rose 0.4%

  • Euro Stoxx 50 futures rose 0.7%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0691

  • The Japanese yen was little changed at 139.44 per dollar

  • The offshore yuan rose 0.1% to 7.1104 to the dollar

  • The Australian dollar rose 0.2% to $0.6519

  • The pound was unchanged at $1.2441


  • Bitcoin fell 1.3% to $26,773.34

  • Ether fell 0.7% to $1,853.7


  • The yield on 10-year Treasury bills rose two basis points to 3.67%

  • Japan’s 10-year yield was little changed at 0.425%

  • Australia’s 10-year yield rose four basis points to 3.64%


This story was produced with assistance from Bloomberg Automation.

–With help from Joanna Ossinger.

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