Stocks drift before tech earnings as Fed drama confounds
TSMC, the world's main producer of advanced AI chips, is expected to post a jump in second-quarter profit to record levels, though US tariffs and a strong Taiwan dollar could weigh on its outlook. Profits for streaming giant Netflix , due later on Thursday, are also on investors' radar.
"With Netflix having outperformed the S&P 500 year-to-date by a sizeable 33 percentage points, and the street fully subscribed to the bullish investment case, Netflix will need to blow the lights out with a solid beat and raise," said Chris Weston, head of research at Pepperstone.
MSCI's broadest index of Asia-Pacific shares outside Japan was up just 0.06 per cent and the Nikkei slipped 0.24 per cent.
Canadian retailer Alimentation Couche-Tard said on Wednesday it was withdrawing its US$47 billion takeover bid for Seven & i Holdings, citing a lack of constructive engagement by the Japanese retailer.
Shares of Seven & i Holdings fell 9 per cent.
European futures jumped as EUROSTOXX 50 futures rose 0.56 per cent and FTSE and DAX futures added about 0.4 per cent each.
Nasdaq futures and S&P 500 futures fell 0.1 per cent each.
Also dominating the market mood was confusion over Fed Chair Powell's future at the central bank, after initial news that US President Donald Trump was likely to fire Powell soon sent stocks and the dollar sliding.
Trump was quick to deny the reports, restoring some calm to volatile markets, but he kept the door open to the possibility and renewed his criticism of the central bank chief for not lowering interest rates.
"I think the most likely outcome is for Powell to stay on until the end of his term next year. Having said that, this is not the first time, so there are going to be episodes of volatility in the dollar as a result of political noise," said Carlos Casanova, UBP's senior economist for Asia.
The dollar was on a fragile footing on Thursday, after having lost ground overnight on worries that the Fed's independence could come under threat.
The euro was last down 0.17 per cent at US$1.1620 while sterling eased 0.13 per cent to US$1.3400 after both currencies made gains in the previous session.
The dollar was little changed at 98.49 against a basket of currencies, having lost 0.33 per cent overnight.
US Treasury yields also steadied after falling on Wednesday, due to expectations that Powell's removal could lead to quicker and deeper rate cuts, with the two-year yield last at 3.9022 per cent.
The benchmark 10-year yield was little changed at 4.4673 per cent.
In Japan, yields on government bonds rose on Thursday as investors extended a selloff driven by fiscal concerns ahead of a closely watched upper house election on Sunday. Bond yields move inversely to prices.
"Regardless of the outcome of the election, we are going to see additional fiscal spending coming out of Japan," said UBP's Casanova.
Elsewhere, oil prices rose on Thursday, with Brent crude futures up 0.47 per cent at US$68.84 a barrel. US crude futures gained 0.62 per cent to US$66.79.
Spot gold dipped 0.15 per cent to US$3,341.29 an ounce.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
20 minutes ago
- Malay Mail
Bangladesh signs wheat deal with US to secure tariff relief amid trade tensions
DHAKA, July 20 — Bangladesh signed a deal on Sunday to import 700,000 tonnes of wheat annually from the United States over the next five years, in a move aimed at securing tariff relief from the Trump administration amid growing trade tensions, officials said. The agreement — formalised through a memorandum of understanding inked in Dhaka between the Ministry of Food and trade group US Wheat Associates — comes at a critical moment, with Washington set to impose a 35 per cent tariff on Bangladeshi exports from August 1. Officials in Dhaka hope the pact will help narrow Bangladesh's US$6 billion trade deficit with the US and pave the way for more-favourable treatment of key export items, particularly garments, which dominate shipments to the United States. Bangladesh's de facto food minister, Ali Imam Majumder, said at the signing ceremony that the agreement would not only ensure a steady supply of high-quality wheat at competitive prices but also strengthen trade ties between the two nations. 'This step reflects our willingness to build mutual trust and deepen economic cooperation with the United States,' he said. The US tariff hike has rattled Bangladesh's export sector, especially the ready-made garments industry, which fears losing competitiveness in one of its largest markets. The wheat initiative is widely seen as part of a broader diplomatic and trade strategy to soften Washington's stance and open the door for further negotiations. Officials from the Ministry of Commerce said talks are ongoing with US counterparts in an effort to lower the duty, arguing that such high tariffs could significantly undermine Bangladesh's competitiveness in the American market. Bangladesh imports around 7 million tonnes of wheat each year, with the bulk sourced from the Black Sea region due to its lower cost. Smaller volumes of higher-quality wheat, including some from the United States, are also imported for blending. — Reuters
Malay Mail
2 hours ago
- Malay Mail
Tight race in Japan's upper house election could shake Prime Minister Ishiba's political standing
TOKYO, July 20 — Japanese voters headed to the polls on Sunday in a tightly contested upper house election that could unleash political turmoil, with rising prices and immigration concerns threatening to weaken Prime Minister Shigeru Ishiba's grip on power. Voting ends at 8pm (7pm Malaysian time), when media are expected to project results based on exit polls. Opinion polls suggest Ishiba's Liberal Democratic Party and coalition partner Komeito may fall short of the 50 seats needed to retain control of the 248-seat upper house of parliament in an election where half the seats are up for grabs. The polls show that smaller opposition parties pushing for tax cuts and increased public spending are set to gain, among them the right-wing Sanseito which has grabbed voters with slick online messaging about a 'silent invasion' of foreigners. 'A lot of my friends are voting for Sanseito,' said Rin Kuramoto, a 21-year-old college student. 'I think their slogan of 'Japanese-first' is very powerful and easy to understand.' Kuramoto, who declined to say which party got her vote, braved sweltering summer heat to cast her ballot at a packed polling station at the Setagaya ward in Tokyo, the capital. About a fifth of registered voters had already cast their ballot before election day, a sharp increase from the last upper house election three years ago, public broadcaster NHK said. That could signal higher turnout, which may not be a good sign for Ishiba's government, although the vote is being held over a bank holiday weekend. A poor showing by his coalition could shake investor confidence in the world's fourth-largest economy and disrupt critical trade talks with the United States, analysts said. Ishiba may have to choose between making way for a new LDP leader or scrambling to secure the backing of some opposition parties with policy compromises, said Rintaro Nishimura, an associate at the Asia Group in Japan. 'Each scenario requires the LDP and Komeito to make certain concessions, and will be challenging, as any potential partner has leverage in the negotiations.' After the election, Japan faces a deadline of August 1 to strike a trade deal with the United States or face punishing tariffs in its largest export market. These could squeeze the economy and further pressure the government to give financial relief to households already reeling from inflation, including a doubling of rice prices since last year. With an eye on a jittery government bond market, the LDP has called for fiscal restraint and rejected opposition calls for major tax cuts and welfare spending to soften the blow. Ishiba's administration lost its majority in the more powerful lower house in October. That was the LDP's worst showing in 15 years, roiling financial markets and leaving the prime minister vulnerable to no-confidence motions that could topple his administration and trigger a fresh general election. 'The LDP has been running the government without resolving anything,' said Kaoru Kawai, a 59-year-old novelist who voted for the opposition Constitutional Democratic Party of Japan. Ruled by the LDP for most of the post-war period, Japan has so far largely avoided the social division and fracturing of politics seen in other industrialised democracies. — Reuters
New Straits Times
4 hours ago
- New Straits Times
China starts construction of Tibet mega-dam
BEIJING: China started building a mega-dam Saturday on a river running through Tibet and India, with Premier Li Qiang attending the commencement ceremony, state media said. Beijing approved the project in December on the river – known as Yarlung Tsangpo in Tibet and Brahmaputra in India – linking it to the country's carbon neutrality targets and economic goals in the Tibet region. "The electricity generated will be primarily transmitted to other regions for consumption, while also meeting local power needs in Tibet," state news agency Xinhua reported after the groundbreaking ceremony in southeastern Tibet's Nyingchi. Once built, the dam could dwarf the record-breaking Three Gorges Dam on the Yangtze River in central China – and have a potentially serious impact on millions of people downstream in India and Bangladesh. The project will entail constructing five hydropower stations, with the total investment estimated to be around 1.2 trillion yuan (US$167.1 billion), Xinhua said. India said in January it had raised concerns with China about the project in Tibet, saying it will "monitor and take necessary measures to protect our interests." China "has been urged to ensure that the interests of the downstream states of the Brahmaputra are not harmed by activities in upstream areas", India's foreign ministry said then. In December, Beijing's foreign ministry said that the project would not have any "negative impact" downstream, adding that China "will also maintain communication with countries at the lower reaches" of the river. Besides downstream concerns, environmentalists have also warned about the irreversible impact of such mega projects in the ecologically sensitive Tibetan plateau. Both India and China, neighbours and rival Asian powers, share thousands of kilometres of disputed borders, where tens of thousands of soldiers are posted on either side.
