Australia

Australian shares are set to edge higher after another big move for US stocks.

ASX futures were up 63 points or 0.9% at 6725 as of 8:00am on Tuesday, pointing to a gain at the open.

US shares surged higher as strong earnings so far counter economic worries. Bank of America and Bank of New York Mellon gained more than 5% on better than expected results. The Dow gained 1.9% to 30185, the S&P 500 rose 2.6% to 3677 and the Nasdaq soared 3.4% to 10675. It's the first time the Nasdaq has gained 3% or more following a decline of 3% or more since March 2020, according to Dow Jones Market Data.

In commodity markets, Brent crude oil is flat at $US91.62 a barrel, gold edged up 0.2% to US$ 1,648.16.

In local bond markets, the yield on Australian 2 Year government bonds rose to 3.37% while the 10 Year was up to 4.02%. Overseas, the yield on 2 Year US Treasury notes rose to 4.45% and the yield on the 10 Year US Treasury notes was up to 4.02%.

The Australian dollar hit 62.82 US cents from the previous close of 62. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 104.23.

Asia

Chinese shares ended broadly higher, a day after the country's party congress kicked off and an official said China's economy "significantly improved" in 3Q. Defense and software companies advanced, offsetting losses by coal miners. AVIC Shenyang Aircraft gained 6.8%, Sangfor Technologies jumped 7.7% and Yonyou Network added 5.1%. Among the laggards, China Coal Energy lost 2.8% after its coal sales fell 12% on year in September. Its peer, Yankuang Energy, dropped 2.0%. The Shanghai Composite Index added 0.4% to 3084.94, the Shenzhen Composite Index climbed 0.7% and the ChiNext Price Index was flat. Investors will be watching China's 3Q GDP growth data due Tuesday.

Hong Kong's Hang Seng Index closed 0.2% higher at 16612.90, thanks to a late-session rally that pushed the benchmark index into positive territory after falling as much as 1.7% earlier. The upturn tracked A-share markets and came after an official said the Chinese economy "significantly improved" in 3Q, ahead of Tuesday's GDP data release. Pharma companies continued a strong showing, with Hansoh Pharma jumping 13% and Sino Biopharma gaining 3.6%. Cnooc climbed 1.9% after projecting nine-month profit to more than double on year. Laggards included casino stocks, which have been sold off in recent sessions amid elevated Covid-19 cases in China. Sands China dropped 1.5% and Galaxy Entertainment gave up 1.4%.

Japanese shares ended lower, dragged by declines in tech stocks, as concerns persisted over the Fed's aggressive tightening. M3 dropped 3.9% and MonotaRO lost 3.7%. The Nikkei Stock Average fell 1.2% to 26775.79. USD/JPY was at 148.67, compared with 148.74 late Friday in New York. Investors are focusing on the war in Ukraine and yen movements after the Japanese currency fell to a new 32-year low against the dollar on Friday.

Europe

European stocks gained as rising crude prices boost oil stocks. The Pan-European Stoxx Europe 600 and German DAX advanced about 0.8%, the French CAC 40 climbed 0.7% and in London, the FTSE 100 ticked up 0.6%.

The rise in Brent crude lifted the likes of BP, Eni, Harbour Energy, Shell and TotalEnergies.

"In the US, we get the Empire manufacturing PMIs," Danske Bank senior analyst Bjorn Tangaa Sillemann said in a note.

"Markets' focus will circle on politics this week with the EU council meeting Thursday, where an EU gas-price cap will be on the agenda.”

North America

US stocks surged Monday, pointing to another day of outsize moves on Wall Street, as investors try to make sense of an unsettled economic outlook and gear up for another batch of earnings.

The S&P 500 rose 2.65% as of 4 p.m. ET trading. The index slid 2.4% Friday after a 2.6% gain Thursday. The Dow Jones Industrial Average added about 550 points, or 1.9%, and the Nasdaq Composite climbed 3.4%.

The indexes pulled out of their latest selloff in part on the strength of a raft of corporate earnings reports, including those by some of the nation's biggest banks. Investors were bracing for evidence that many companies were already mired in a slump. So far, they have been pleasantly surprised, said Quincy Krosby, chief global strategist at LPL Financial.

"The pessimism has been palpable, and the bar had come down for earnings reporting," Ms. Krosby said. "We've seen primarily positive surprises. When you have a market that's oversold, it doesn't take much of a catalyst to have it move up."

Investors said the big gains and losses underscored angst over a possible recession and the pace of interest-rates rises, rather than fundamental changes in the economy. Adding to those worries, recent inflation data showed rapid price growth has been hard to slow, making it more likely that the Federal Reserve will continue to raise rates aggressively.

"We're going into a global recession so there's very little scope for anything to be rallying," said Hani Redha, a portfolio manager at PineBridge Investments. "There's still a downtrend here."

The next big test for the market is earnings season. Results gather pace this week with reports due in the coming days from Goldman Sachs Group, Johnson & Johnson, Netflix and Tesla, among other major companies. Results and guidance from executives about the next few quarters will pose a test for a market that has been buffeted by rising rates this year.

Though analysts cut estimates for third-quarter earnings growth in recent months, some investors say forecasts are still too upbeat about the prospects for corporate profits over the next year, given the likelihood of a recession. The US is forecast to contract and unemployment to rise in the coming 12 months, according to a Wall Street Journal survey of economists.

"The market has priced the Fed hikes and the tightening of financial conditions quite well but it hasn't priced the impact of that tightening yet," Mr. Redha said.

Shares of Bank of America rose about 6% in 4 p.m. trading, after the lender said per-share earnings topped analysts' forecasts in the third quarter. Some of the biggest US banks reporting last week said they were nervous of a recession, but their third-quarter earnings showed few signs of one yet.

Bank of New York Mellon, the world's biggest custody bank, jumped 5.1% after also reporting results that beat expectations.