(Bloomberg) — Asian equities slipped on Wednesday following a sluggish day on Wall Street, as investors prepared for a slew of earnings that will set the tone for risk assets.
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Most major benchmarks across the region were in the red, as a guage for Hong Kong tech stocks fell for a second day. Two-year Treasury yields, which are more sensitive to interest-rate policy, fell four basis points in early Asian trading.
Investors are looking for any clues on whether the artificial-intelligence euphoria has more room to run with the world’s currently most influential stock, Nvidia Corp., set to report earnings. Weak sentiment toward the tech sector may linger following disappointing results earlier this week from Chinese e-commerce firm PDD Holdings Inc. Chinese companies Cnooc Ltd., BYD Co. and Meituan are all set to report on Wednesday.
“Nvidia’s results will be looked upon as a make-or-break moment for global markets, given the extreme optimism priced around AI stocks over the past year,” Jun Rong Yeap, a market strategist with IG Asia Pte., wrote in a note. “Its share price currently hanging around recent high suggests expectations in place for the AI darling to deliver yet again, which may also set the stage for some aggressive unwinding in the event of any negative surprises.”
In Asia corporate news, China’s top-selling automaker BYD said it sees overseas deliveries to account for almost half of total sales in the future, suggesting it will continue to set up global production hubs to overcome punishing tariffs.
Japanese consumer electronics company Sony Group Corp. saw its shares climb as much as 2.7% after saying it will hike the price of its PlayStation 5 in Japan. Seven & i Holdings Co. shares fell after the operator of 7-Eleven stores sought designation from authorities in a move that may raise potential hurdles for a takeover.
In other markets, Bitcoin fell below the $60,000 level early Wednesday as part of a broad crypto market retreat that included a sharp drop in second-largest token Ether.
Oil rose on Wednesday after sliding in the previous session to end a three-day rally. Gold retreated after a three-day advance that’s taken it closer to its all-time high.
In economic data, US consumer confidence rose to a six-month high in August as more upbeat views of the economy and inflation offset waning optimism about the labor market. Meanwhile, the Australian dollar rose after the nation’s July inflation data beat expectations.
With questions swirling around Federal Reserve policy, the state of the economy and the US presidential race, at least one thing seems clear on Wall Street: spending on AI is still key.
“We remain bullish, but risks are now skewed to the downside over the very near-term,” Chris Senyek at Wolfe Research said of markets before a key US payrolls report on Sept. 6. “From a seasonal perspective, we enter a weaker period that is even more amplified in election years.”
Nvidia Earnings
Investors are gearing up for big swings in Nvidia’s shares after the $3.2 trillion company reports. Trading in the options market implies a nearly 10% move in either direction on the day following the results. The stock has rallied about 160% this year and 1,000% from its October 2022 bear-market low.
Analysts, on average, are predicting that the giant chipmaker will project revenue growth of more than 70% for the current quarter. Some are estimating an even larger surge. Nvidia’s results and forecast also will serve as 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
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.1% as of 10:43 a.m. Tokyo time
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Nikkei 225 futures (OSE) fell 0.3%
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Japan’s Topix fell 0.2%
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Australia’s S&P/ASX 200 fell 0.7%
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Hong Kong’s Hang Seng fell 0.1%
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The Shanghai Composite fell 0.1%
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Euro Stoxx 50 futures were little changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1179
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The Japanese yen was little changed at 144.10 per dollar
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The offshore yuan was little changed at 7.1243 per dollar
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The Australian dollar rose 0.3% to $0.6811
Cryptocurrencies
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Bitcoin fell 4.5% to $59,075.26
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Ether fell 5.9% to $2,428.86
Bonds
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The yield on 10-year Treasuries was little changed at 3.82%
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Japan’s 10-year yield advanced one basis point to 0.885%
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Australia’s 10-year yield advanced two basis points to 3.93%
Commodities
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West Texas Intermediate crude rose 0.5% to $75.88 a barrel
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Spot gold fell 0.2% to $2,519.99 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi.
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