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US, Japanese, Korean stocks hit new records on AI optimism

All three major US equity indices reached record highs on Tuesday, supported by ongoing enthusiasm for artificial intelligence and anticipation of positive quarterly results from leading technology firms with earnings figures due from Alphabet, Meta Platforms and Microsoft later Wednesday. Asian sentiment remains buoyant following fresh peaks for Japan’s Nikkei 225 and South Korea’s Kospi, though Australian equities declined after inflation outpaced forecasts. European markets slipped as German and consumer confidence data disappointed. US Treasury yields were stable ahead of the Federal Reserve's (Fed) interest rate decision due later Wednesday, with the 2-year trading just below 3.5% and the 10-year just below 4%. Gold stabilised around USD 3980 after falling multiple days in a row.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

NYSE
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All three major US indices set new records on Tuesday, as the Dow Jones Industrial climbed 0.3%, the S&P 500 increased 0.2%, and the Nasdaq 100 rose 0.7%. Strong enthusiasm for artificial intelligence and hopes for upbeat quarterly results from large technology companies underpinned the advance, while markets looked ahead to a potential interest rate cut by the Fed on Wednesday. Apple’s valuation surpassed USD 4 trillion, supported by demand for the latest iPhone model. Most US sectors are trading above their 200-day moving averages, in spite of signals of labour market weakness.

US private sector adds 55,000 jobs, consumer confidence slips

Preliminary ADP data released on Tuesday show US private sector employers added an average of 14,250 jobs per week over the four weeks ending 11 October, amounting to roughly 55,000 new jobs for the period and marking a rebound from September’s decline. This new weekly employment series, launched amid the US government shutdown, provides timelier insight into labour market developments. While the increase indicates a return to growth, figures remain considerably softer than earlier in the year and will be subject to revision with ADP’s monthly National Employment Report. Meanwhile, the Conference Board Consumer Confidence Index for the US edged down by 1 point to 94.6 in October, as reported on Tuesday, reflecting a small decline from September’s revised figure. Inflation and prices continued to dominate consumer concerns, while holiday spending plans suggest consumers intend to spend less than last year.

Nikkei and Kospi set new records on AI optimism

Japan’s Nikkei 225 surged 2.4% to a record close on Wednesday and South Korea’s Kospi jumped 1.8% to an all-time high, both supported by strong demand for artificial intelligence-related stocks and favourable US trade developments. In contrast, Australia’s S&P/ASX 200 fell 1% following hotter-than-expected third-quarter inflation data, which scaled back prospects of near-term rate cuts by the Reserve Bank of Australia. Mainland China’s CSI 300 was 1.1% higher, while the Hang Seng Index in Hong Kong was down 0.3%.

German consumer sentiment continues to weaken

The GfK Consumer Climate indicator for Germany is forecast to decline by 1.6 points to -24.1 points in November, following a revised -22.5 points the previous month, with the latest data published on Tuesday highlighting a further drop in income expectations among German consumers. Income expectations fell sharply by nearly 13 points to 2.3 points in October, erasing gains made in the previous month and reaching their lowest level since March, as ongoing geopolitical tensions, rising inflation fears and job insecurity weighed on sentiment. The current data suggest little prospect of a near-term recovery in private consumption. European stock markets closed modestly softer on Tuesday. The Euro Stoxx 50 slipped 0.1%, Germany’s DAX lost 0.1%, and France’s CAC 40 retreated 0.3%, while the Swiss Market Index dropped 1.4%.

UBS profit surges 74% in third quarter

UBS reported a 74% increase in third-quarter net profit on Wednesday, reaching USD 2.5 billion, surpassing market forecasts and up from USD 1.43 billion a year ago, due to robust investment banking revenues and the release of USD 668 million in litigation provisions primarily related to Credit Suisse. Third-quarter revenues totalled USD 12.76 billion, while wealth management attracted USD 38 billion in net new assets. The results come as Switzerland’s largest bank continues to integrate Credit Suisse, a process that UBS aims to complete by the end of next year. UBS also faces the prospect of higher capital requirements as Swiss regulators respond to past sector risks, though the bank has voiced concerns over what it considers excessive proposals.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Adidas, ADP, Adyen, Alphabet, BASF, Boeing, Caterpillar, CVS Health, Deutsche Bank, Glencore, KLA, Mastercard, Mercedes-Benz Group, Meta Platforms, Microsoft, ServiceNow, Starbucks, UBS, and Verizon.

Economic data in focus: Spanish gross domestic product (09:00), Spanish retail sales (09:00), Italian trade balance (10:00), Bank of Canada interest rate decision (14:45) and Federal Reserve interest rate decision (19:00).

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Editor: Alessandro Fezzi
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