Asian Shares Rise, Track Wall st Gains as Earnings Ramp Up

The yield on the two-year Treasury, which tends to track expectations for Fed movement, rose to 4.22% from 4.18% late Friday. Corporate earnings are seen as a good indicator of how well companies are coping with the slowing economy and higher costs. Another partisan battle in Washington over the nation’s ability to borrow may roil markets if the Democrats and Republicans can’t agree on allowing the U.S. Profits are one of the main levers that set stock prices.

BANGKOK (AP) – Stocks were higher in Asia on Tuesday after a tech-led rally on Wall Street as investors bet the Federal Reserve will trim its rate hikes to tamp down inflation. “Markets are assuming a pro-growth stance as investors get more comfortable with the idea of an improving macro backdrop ahead of a busy week of data from both a macro and micro perspective,” Stephen Innes of SPI Asset Management said in a commentary. A preliminary reading for manufacturing in Japan remained steady in January at its lowest level in over two years, with exports declining faster. Many markets in the region were closed for Lunar New Year holidays. “And if one takes a look under the hood, in the heat of the moment, it has that unmistakable feel of pandemic-era trading, supported by solid moves in mega cap tech stocks,” he said.

Tech stocks in the S&P 500 rose 2.3% Monday, with chipmaker Advanced Micro Devices leading the pack with a 9.2% gain. Markets have been swinging between hope and caution as investors watch to see if the Federal Reserve will dial back on interest rate hikes meant to tame inflation, which has begun to abate in many countries in recent months. The fear is that the Fed and other central banks might go too far, tipping the U.S. The Fed has already pulled its key overnight rate up to a range of 4.25% to 4.5% from virtually zero early last year, and traders are now betting on a nearly 99% probability that the Fed will raise rates by just a quarter point on Feb. 1, according to CME Group.

After soaring through the pandemic thanks to super-low interest rates and a surge in demand from suddenly homebound customers, they’ve been struggling over the last year as the Fed has sharply raised rates. It lost 2 cents to $81.62 on Monday. The euro rose to $1.0877 from $1.0875. The dollar fell to 130.27 Japanese yen from 130.66 yen. In other trading Tuesday, U.S. 3 cents to $81.65 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the pricing benchmark for international trading, lost 10 cents to $88.06 per barrel.