Australia

Australian shares are set to dip despite tech stocks rising on Wall Street amid better-than-expected earnings reports.

ASX futures were down 33 points or 0.5% at 6636 as of 8:00am on Thursday, pointing to a fall at the open.

The Nasdaq Composite advanced 1.6%, with Netflix shares jumped 7.4% after reporting it lost fewer subscribers last quarter than it had expected. The S&P 500 rose 0.6%. The Dow Jones Industrial Average added 0.2%. All three indexes rose for the second consecutive session and are trading at their highest levels since early June.

Technology, communications and consumer discretionary stocks rallied as investors sought out riskier areas of the market. For much of the year, rising interest rate have weighed on the value of stocks that are more focused on growth rather than near-term cash flows. Some of that pressure has eased over the past month.

"We have a far less volatile 10-year US Treasury yield, inflation expectations have come down, and earnings season, so far, has been better than feared," said Art Hogan, chief market strategist at B. Riley FBR Inc. "Technology and consumer services have been some of the most beaten-down segments of the market. Now risk appetite is coming into those areas."

Locally, S&P/ASX 200 closed 1.65% higher at 6759.2 on Wednesday for its largest gain in over three weeks.

All 11 sectors rose as the benchmark index built on a strong lead from US equities, which reacted positively to the latest round of company earnings reports.

Tech and materials stocks led the gains. Megaport surged 23% after its first quarterly earnings profit, while Block, WiseTech and Xero put on between 4.4% and 5.9%.

Iron-ore miners BHP, Rio Tinto and Fortescue gained between 1.4% and 5.2%, but were outperformed by lithium and steel stocks.

Major banks rose but lagged most financial stocks, led by Zip Co, wealth managers and smaller lenders. It was the ASX 200's largest daily rise since June 27.

Commodity markets rallied after weeks of decline, iron ore rose to US$100.05, Brent crude oil lost 0.4% to $US106.92 a barrel, gold slipped 0.3% to US$1,712.10.

In local bond markets, the yield on Australian 2 Year government bonds rose to 2.77% while the 10 Year edged up to 3.54%. Overseas, the yield on 2 Year US Treasury notes settled to 3.23% and the yield on the 10 Year US Treasury notes hit 3.03%.

The Australian dollar is down 0.3% to 68.76 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies slipped to 99.10.

Asia

China stocks ended higher, tracking broad gains among other Asian equities as fears of a potential global recession eased. The benchmark Shanghai Composite Index rose 0.8% to 3304.72, the Shenzhen Composite Index added 0.7% to 2210.46 and the ChiNext Price Index gained 0.5% to 2765.16. Investors may adopt a wait-and-see attitude in the near term, after China maintained its one-year and five-year loan prime rates, IG's market strategist Yeap Jun Rong says in a note, adding that economic reopening continues to unfold at a slower pace. Shipping stocks were higher, with Cosco Shipping Development advancing 2.7% and China Merchants Energy Shipping up 4.3%.

Hong Kong's Hang Seng Index rose 1.1% to finish at 20890.22, bouncing back from losses the previous session as tech and consumer-related sectors gained. The local market tracked regional equities higher, taking its cue from overnight gains on Wall Street as investors cheered earnings. AI specialist SenseTime rebounded 11% after conducting its first share repurchase since listing. Alibaba Group gained 2.3% and Meituan added 3.0%. Other gainers included hot-pot chain operator Haidilao, rising 4.1%, and Anta Sports, up 2.5%. Property developers continued to weaken, with Longfor Group and China Overseas Land each down more than 2.5%.

Japan’s Nikkei 225 jump 2.7%.

Europe

European markets dropped amid continued concerns about energy supplies caused by uncertainty over the potential re-start of a gas pipeline. The pan-European Stoxx Europe 600 and German DAX dropped 0.2%, and the French CAC 40 retreated 0.3%. Italy's FTSE MIB was down 1.6% and Italian financial stocks were among the biggest pan-European fallers as political turmoil continues in Rome.

"Headlines about Russia contemplating further maintenance to its Nord Stream 1 pipeline have put European stocks under pressure, as traders weigh up whether they can push this risk rebound much further," IG analyst Chris Beauchamp writes.

London’s FTSE 100 closed Wednesday down 0.4% to 7267 points amid a mixed session where investors took profit from the four-day rally, IG chief market analyst Chris Beauchamp says in a note.

In addition, UK inflation data also trimmed the appetite of dip buyers, he notes. Scottish Mortgage Investment Trust was the index's top winner with an increase of 4.8%, while DS Smith led the falls with a 3.8% slip.

North America

Technology and other growth stocks climbed Wednesday as more corporate earnings reports rolled in that were better than investors feared.

The Nasdaq Composite advanced 1.6%. The S&P 500 rose 0.6%. The Dow Jones Industrial Average added 0.2%. All three indexes rose for the second consecutive session and are trading at their highest levels since early June.

Technology, communications and consumer discretionary stocks rallied as investors sought out riskier areas of the market. For much of the year, rising interest rate have weighed on the value of stocks that are more focused on growth rather than near-term cash flows. Some of that pressure has eased over the past month.

"We have a far less volatile 10-year US Treasury yield, inflation expectations have come down, and earnings season, so far, has been better than feared," said Art Hogan, chief market strategist at B. Riley FBR Inc. "Technology and consumer services have been some of the most beaten-down segments of the market. Now risk appetite is coming into those areas."

Stocks have swung in recent days during an earnings season that has been scrutinized for signs about how the highest inflation in more than four decades and slowing economic growth are affecting companies. Recent results from companies such as Goldman Sachs and Citigroup came in above Wall Street's expectations, even though both banks reported substantial declines in profit.

Netflix followed suit late Tuesday, saying it lost fewer subscribers last quarter than it had expected and forecast it would add 1 million net new subscribers in the current period. Shares rose $14.81, or 7.4%, to $216.44 and are up 14% this week, on pace for their best weekly performance since July 2020.

"Earnings have been supportive of the narrative that growth isn't falling off a cliff," said Fahad Kamal, chief investment officer at Kleinwort Hambros. "It doesn't necessarily look like a recession is coming. But companies have been cautious with their guidance."

Tesla, which reported after the market close, posted its first sequential decline in quarterly profit in more than a year as it recovers from an extended shutdown at its Shanghai assembly plant. The electric-vehicle maker also said it has sold 75% of the bitcoin it had purchased, little more than a year after investing in the digital currency. Shares were little changed after hours.

Among other notable earnings reports, marketing house Omnicom rose $2.65, or 3.9%, to $70.06 after it posted revenue that beat analysts' expectations and raised its guidance.

Oil services firm Baker Hughes fell $2.33, or 8.3%, to $25.89 after its chief executive said he sees demand deteriorating over the next 18 months.

Abbott Laboratories fell $1.70, or 1.6%, to $108.23 after reporting its nutrition sales were hit by a recall and manufacturing shutdown of some infant formula products, though it raised its guidance.

Sentiment on Wall Street remains at historically pessimistic levels, thought some investors say they see this earnings season as a potential turning point for this year's market rout.

"Market sentiment is worse today than it was early in the pandemic; even 2008 pales in comparison to the bearishness right now," said Keith Buchanan, portfolio manager at Globalt, an Atlanta-based money manager. "This earnings season could be the catalyst for that to start to change."

Mr. Buchanan says his firm has cash to deploy across its strategies, particularly in global stocks. "Once we see the last flush lower or confirmation of a breakout, we are ready to get aggressive," he said.

Elsewhere, sales of previously owned homes fell for their fifth straight month in June, as rising home prices and higher interest rates continued to weigh on buyer demand. The median sales price of an existing home notched another record in June, rising 13.4% from the previous year to $416,000.

In other markets, the yield on the benchmark 10-year Treasury note edged up to 3.035% from 3.017% on Tuesday. Yields rise when prices fall. The yield on shorter-dated bonds remained higher, with the 2-year yield at 3.248%. That is known as an inverted yield curve and is a popular recession predictor.

Brent, the global benchmark for crude, ticked down 0.4% to $106.92 a barrel, reversing direction after three consecutive days of gains.

"Energy prices reflect the wider sentiment in the market. What's creating this volatility are higher chances of a recession," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.