Australia

Australian shares are set to edge higher after US stocks rose Friday, with big gains by Apple helping offset declines among consumer discretionary stocks weighed down by a sales warning from e-commerce giant Amazon.

ASX futures were up 92points or 1.35% at 6868 as of 7:00am on Monday, pointing to a gain at the open.

In the US, the tech-heavy Nasdaq Composite Index rose 309.78 points, or 2.9%, to 11102.45, bouncing back after two days of declines. The S&P 500 added 93.76 points, or 2.5%, to 3901.06 while the Dow Jones Industrial Average was up 828.52 points, or 2.6%, to 32861.80. All three indexes finished the week with gains, with the Dow industrials' recent run-up putting it down less than 10% year-to-date.

Octobers are often billed as bad luck by traders, since the stock-market crash of 1929 and Black Monday both took place during the month. This year, however, the Dow industrials are on track to finish October up more than 14%, which would be its best monthly performance since January 1976.

This week's gains are a testament to how the group of companies known as FAANG -- Facebook parent Meta Platforms, Apple, Amazon, Netflix and Google parent Alphabet -- no longer drive the performance of major stock indexes as they did for years. Those companies' shares all are down significantly in 2022, and Meta, Amazon and Alphabet all fell sharply this week after reporting lackluster earnings.

In commodity markets, Brent crude oil slipped 1.23% to $US95.77 a barrel, gold edged down 1.1% to US$1,644.86.

In local bond markets, the yield on Australian 2 Year government bonds dropped to 3.2% while the 10 Year fell to 3.73%. Overseas, the yield on 2 Year US Treasury notes rose to 4.41% and the yield on the 10 Year US Treasury notes was up at 4.01%.

The Australian dollar hit 64.12 US cents down from the previous close of 64.6. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged up to 103.04.

Asia

Shares in China faced a wave of selling, as negative sentiment continued its hold on the market and the country held fast to its zero-Covid policy that is taking a toll on the economy. The Shanghai Composite Index declined 2.3% to 2915.93, bringing year-to-date losses to 20%. Nearly all sectors fell, with auto makers and developers hit especially hard. China's largest electric-vehicle maker BYD dropped 5.9% and China Fortune Land Development retreated 5.6%. Liquor maker Kweichow Moutai fell 2.9%, extending its losing streak to a 10th session. The Shenzhen Composite Index dropped 3.4% and the ChiNext Price Index was 3.7% lower.

Hong Kong's benchmark Hang Seng Index fell 0.4% to 15361.35. Ongoing Covid-19 uncertainties may continue to weigh on sentiment as the risk of renewed Covid restrictions continue to loom, says IG market strategist Yeap Jun Rong in a note. The U.S. dollar regaining some strength and U.S. equity futures trending in the red could also translate to a lackluster session in Asian markets, the analyst adds. Decliners include China Mengniu Dairy, which falls 8.4%, Longfor Group down 4.3% and Alibaba Health Information Technology 3.6% lower. Gainers include Wuxi Biologics, which is up 2.6%.

Japanese stocks ended lower, dragged by falls in electronics and shipping stocks as caution continues over earnings and the global economic outlook. Mitsubishi Electric dropped 2.9% after second-quarter net profit fell 3.9% on year and missed analysts' expectations. The Nikkei Stock Average fell 0.9%.

Europe

The pan-European Stoxx 600 index edged up 0.1% to 410.72 in late trade, helped by gains in U.S. stock indexes. U.K. stocks underperform, however, with the FTSE 100 falling 0.5%, dragged down by a 9.2% drop in NatWest following its latest results, with other banks following suit.

U.S. stocks have been boosted by strong numbers from oil giants Chevron and Exxon, but concerns about earnings are likely to return, writes Chris Beauchamp, chief market analyst at online trading platform IG. "The refrain about weaker forecasts for 4Q refuses to go away, and will come back to haunt markets once earnings season begins to wind down," he said.

Germany's DAX rose 0.2% while France's CAC 40 gained 0.5%.

North America

US stocks rose Friday, with big gains by Apple helping offset declines among consumer discretionary stocks weighed down by a sales warning from e-commerce giant Amazon.

The tech-heavy Nasdaq Composite Index rose 309.78 points, or 2.9%, to 11102.45, bouncing back after two days of declines. The S&P 500 added 93.76 points, or 2.5%, to 3901.06 while the Dow Jones Industrial Average was up 828.52 points, or 2.6%, to 32861.80. All three indexes finished the week with gains, with the Dow industrials' recent run-up putting it down less than 10% year-to-date.

Octobers are often billed as bad luck by traders, since the stock-market crash of 1929 and Black Monday both took place during the month. This year, however, the Dow industrials are on track to finish October up more than 14%, which would be its best monthly performance since January 1976.

Amazon's shares slid $7.55, or 6.8%, to $103.41 Friday following downbeat guidance for its current quarter, which includes the crucial holiday shopping period. Meta's shares edged $1.26, or 1.3%, higher to $99.20 after losing nearly 25% on Thursday following disappointing quarterly results. Apple was a bright spot, leading the Dow industrials higher with gains of $10.94, or 7.6%, to $155.74.

Meanwhile, real estate, financials and staples were some of the biggest contributors to the indexes' weekly gains. All but one S&P 500 sector ended the week higher, with communication services stocks the outlier. Only the consumer discretionary sector finished Friday in the red.

"Since the financial crisis, you've had this massive rally in tech stocks on the combination of cheap energy, very low interest rates and a massive acceleration in the adoption of digital services," said Peter Garnry, head of equity strategy at Saxo Bank. "Now, on the backside of this pandemic, with interest rates and inflation suddenly out of the bottle, you've seen a drastic repricing of tech stocks. A lot of investors are beginning to question their portfolios."

Investors worry that a US economic slowdown is beginning to take root as consumers and businesses pull back amid stubbornly high inflation and tighter central-bank policy.
"My gut feeling is that tech companies are leading where other companies will follow in the coming months," said Dan Boardman-Weston, chief executive officer of BRI Wealth Management.

Not all third-quarter earnings have been bad. Apple reported record revenue in its latest quarter, while oil giants Exxon Mobil and Chevron on Friday posted some of their highest-ever quarterly profits. Results from some US banks and industrial bellwether Caterpillar have also been surprisingly resilient.

Still, at roughly the midpoint for the latest quarter's earnings reports, results haven't been encouraging. The blended earnings growth rate for the S&P 500 in the third quarter, which includes both reported and estimated earnings, is 2.2%, according to FactSet. That would represent the lowest year-over-year earnings growth rate reported by the index since 2020.

Recent figures on the strength of the US economy have been mixed. Data Friday showed a stronger-than-expected monthly rise in consumer spending in September. The Fed's preferred inflation gauge, the core personal-consumption expenditures index, edged slightly lower last month from August. A separate report showed worker pay and benefits rose 5% in the third quarter from a year before, marking a slight cooling from the prior quarter.