Google helps jittery stocks ahead of the Fed

A man wearing a protective face mask, amid the coronavirus (COVID-19) pandemic, passes a screen showing the Shanghai Composite Index, the Nikkei Index and the Dow Jones Industrial Average outside a brokerage in Tokyo, Japan, February 14, 2022. REUTERS/Kim Kyung-Hoon

SINGAPORE (Reuters) – Better-than-expected results at Microsoft and Google helped stabilize nervous moods in stock markets on Wednesday, while bonds and the dollar were on edge ahead of the U.S. Federal Reserve meeting that is expected to provide another. Great rate hike.

Nasdaq 100 futures rebounded 1.5% and S&P 500 futures rose 0.9% in Asia after Microsoft (MSFT.O) Expect strong revenue growth and Google Alphabet (GOOGL.O) Published solid search engine advertising sales. Read more

Alphabet shares are up 5% after hours, and Microsoft shares are up 4% to weather some of the gloom thrown by an earnings warning at retailer Walmart. (WMT.N) Soft US economic data.

European futures rose 0.2% and FTSE futures rose 0.3%. Japan’s Nikkei Index (.N225) It rose 0.4%.

Things weren’t so bright anywhere else. MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) It fell 0.7%.

The world’s second largest chip maker, SK Hynix (000660.KS), warned that demand is likely to slow as customers cut spending, and shares were down 1.9%. Read more

The euro struggled to compensate for its decline overnight as further cuts in Russian gas flows loomed. The International Monetary Fund has lowered global growth forecasts and within a few hours traders expect the Federal Reserve to raise interest rates sharply.

“They have laid out their plan to raise interest rates to restrictive levels,” said Khun Goh, head of Asia research at ANZ Bank in Singapore. “They want to avoid a hard landing, of course, but they can’t risk inflation staying high.”

The US central bank is expected to announce a 75 basis point interest rate hike at 1800 GMT. Futures contracts indicate a 15% probability of a 100 basis point rise. The Treasury market is already anticipating that many of the sharp rallies in the near term will hurt growth in the long term.

The 10-year Treasury yield was flat at 2.8032% Wednesday, lower than the two-year yield at 3.0508%.

Australian bonds saw a comfortable rally on Wednesday, after consumer price data surprised to the downside of the change – even by a small margin – causing investors to back off bets on a 75 basis point rate hike in Australia next week. Read more

The Australian dollar fell marginally to $0.6935. Three-year bond futures rose 11 points.

Europe and China

On top of concerns about interest rates hurting economies, Europe is facing an energy crisis, China is suffering from restrictive COVID-19 policies and fresh setbacks for the faltering property market.

The euro had its worst session in two weeks on Tuesday, falling 1%, as Russia’s Gazprom said it would cut westbound gas flows and energy prices soared — with German prices for next year soaring to a record high.

The single currency settled at $1.0150 in Asia. The Japanese yen settled at 136.96 per dollar.

The Chinese yuan came under pressure and real estate stocks fell as investors panicked that expanding a boycott of mortgage payments on unfinished apartments and crippling debts of many developers could rebound to the banking industry.

CSI البرية Land Real Estate Index (CSI000952). The Hong Kong Developers Index in the mainland fell 2% (.HSMPI) It decreased by more than 5%, affected by the action of the great developer Country Garden (2007.HK) Announcing the sale of discounted shares. Read more

“China’s housing sector is in the midst of a recession and the recent mortgage boycott is a sign of the severity of the downturn,” said analysts at Societe Generale.

“The extent of this boycott, as it is now, is not far-fetched, but there is a risk of escalation.”

Oil prices stabilized, with Brent crude futures rising at $104.58 a barrel and US crude futures rising 0.3% to $95.32 a barrel.

Gold settled at $1,717 an ounce.

(Tom Westbrook reports). Editing by Christopher Cushing and Kim Coogill

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