World News | Asian stocks mostly rise ahead of key U.S. inflation report

TOKYO, Feb. 14 (AP) – Asian stocks mostly rose, buoyed by gains on Wall Street, as investors awaited U.S. consumer price data due later in the day.

“Sentiment largely follows the positive handover from Wall Street overnight, although there are still many things hanging in the air,” IG market analyst Yeap Jun Rong said in comments.

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In a mixed sign of Japan’s faltering economic recovery, government data showed the world’s third-largest economy grew at an annualized 0.6% in October-December as restrictions linked to the coronavirus pandemic both at home and abroad slowed. relax. Both tourism and local tourism have recovered, and exports have risen, the Cabinet Office reported.

Japan’s benchmark Nikkei 225 rose 0.6 percent to 27,579.73 in early trade. Australia’s S&P/ASX 200 inched up 0.2 percent to 7,435.90. South Korea’s Kospi rose 0.8 percent to 2,471.38 points. Hong Kong’s Hang Seng fell 0.4 percent to 21,083.61 points, while the Shanghai Composite was little changed at 3,282.36 points.

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Stocks on Wall Street rose as traders made one last move ahead of a report that could indicate whether inflation is cooling down the right way or sending markets into more pain. The S&P 500 rose 1.1% in anticipation of Tuesday’s national consumer-level inflation report.

The Dow Jones Industrial Average rose 1.1 percent to 34,245.93 and the Nasdaq Composite gained 1.5 percent to 11,891.79. The S&P 500 rose 46.83 points to 4,137.29.

Stocks had their worst week in nearly two months, the latest decline in a market that has struggled for more than a year amid fears of high inflation.

The Federal Reserve aggressively raised interest rates to the highest level since 2007 in an effort to bring down the worst inflation in generations. High interest rates can keep inflation in check, but doing so risks tipping the economy into recession and dragging down the prices of some investments.

Economists expect Tuesday’s report to show inflation slowed to 6.2% in January. That would be down from 6.5% a month ago and from a summer peak of more than 9%. Perhaps more important than the headline figure is the fact that the data specifically shows the price of services other than housing, such as a haircut or airline tickets. Inflation there has been stubbornly high while other regions have started to decline.

Everyone agrees that inflation is heading in the right direction. The question is how quickly and steadily it will drop to the Fed’s 2% target. The central bank has been saying it plans to keep interest rates higher for longer to ensure it gets the job done on inflation.

Yields were mixed on Monday ahead of the inflation report. The yield on the 10-year U.S. Treasury note, which helps set rates on mortgages and other important lending, fell to 3.70% from 3.75% late on Friday. The two-year yield, which tends to move with expectations of the Federal Reserve, was at 4.54%, near its highest level since November.

All the concerns about inflation and interest rates come against the backdrop of a decidedly lackluster earnings season. S&P 500 companies are on track to report earnings for the final three months of 2022 that are down nearly 5% from a year earlier, according to FactSet.

According to Credit Suisse strategists, this will be the worst earnings season outside of a recession in 24 years.

The pessimism is also fueling gains in the first three months of 2023.

The continued decline in corporate earnings is one reason Morgan Stanley strategists are cautious about the stock market rally so far this year, even as they gave back some of their gains last week. The S&P 500 is up 7.8% so far in 2023, though it remains stuck in a “bear market” after falling more than 20% from last year’s high.

“Price action does not reflect deteriorating fundamentals or the fact that the Fed is raising rates amid an earnings recession – factors that should ultimately determine the bear market low later this spring,” strategists led by Michael Wilson wrote in a note. .” “Risk reward is as bad as we think it is.”

Most of the earnings reports for the quarter are already in, with big utilities and retailers drawing to a close. This week will include reports from Southern Company, Coca-Cola and Kraft Heinz.

In energy trading, benchmark U.S. crude oil fell $1.03 to $79.11 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the internationally priced benchmark, fell 81 cents to $95.80 a barrel.

In currency trading, the dollar edged lower to 132.07 yen from 132.42 yen. The euro traded at $1.0736, up from $1.0726. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)