Australia

Australian shares are pointing lower this morning following a muted session in the US and Europe. As investors await key Q1 earnings data this week, many are anticipating one more rate hike by the Federal Reserve.

ASX futures had fallen 19 points or 0.3% as of 6:00am on Tuesday, indicating a dip at the open.

US stocks and bond yields rose ahead of a busy week of earnings, with some of the biggest corporations due to report.

After a jolt of volatility in the first quarter, April has brought calm across a range of markets, including stocks, bonds and currencies. The muted moves continued into Monday.

Stocks hugged the flatline for much of the session and turned higher in the final hour before close. The S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite each gained 0.3%.

Swings for individual shares have been larger, particularly for some of the companies reporting results. While big banks kicked off earnings on a strong note last week, analysts expect overall S&P 500 earnings to decline for a second straight quarter, notching the steepest quarterly decline since 2020. Tesla, Johnson & Johnson and Netflix are among the companies reporting this week.

This quarter is set to be the most important one for regional banks in decades, with investors on the lookout for what executives say about the banking crisis and their lending standards moving forward.

In commodity markets, Brent crude oil dropped 1.7% to US$84.88 a barrel while gold shed 0.4% to US$1,995.51.

Australian government bonds moved higher, with the 2 Year yield increasing to 3.00% and the 10 Year yield rising to 3.37%. US Treasury notes also gained, with the 2 Year yield rising to 4.18% and the 10 Year yield climbing to 3.59%.

The Australian dollar was little changed at 67.01 US cents, compared to its previous close of 67.06. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, moved up to 96.08.

Asia

Chinese shares ended higher, reversing early losses amid optimism over China's post-Covid recovery. Investors are looking toward March retail sales and Q1 GDP due Tuesday. The economy is expected to expand 4.0% on year in Q1, after Q4's 2.9% gain, according to a Wall Street Journal poll of economists. Liquor producers and insurers leg gainers. Kweichow Moutai rose 2.3% after posting higher Q1 earnings and Ping An Insurance increased 1.9%. Losers included Hangzhou HIK Vision, which fell 1.4% after reporting a drop in Q1 net profit from a year earlier. The benchmark Shanghai Composite Index gained 1.4% to 3385.61, the Shenzhen Composite Index ended up 0.2% and the ChiNext Price Index increased 0.3%.

Hong Kong's benchmark Hang Seng Index ended 1.7% higher at 20782.45, reversing early losses, with sentiment buoyed by hopes for China's robust post-Covid economic rebound. Most shares ended higher, with tech companies and auto makers leading gains. The Hang Seng Tech Index rose 2.2%, with Meituan increasing 4.7% and Xiaomi rising 3.6%. Xpeng finished 12.5% higher after the EV maker unveiled a new platform Sunday, which will help reduce cost amid more intense competition in the industry.

Japanese stocks ended higher, led by gains in bank and electronics shares, as the yen weakened and optimism grew over the stability of the US banking sector. Mitsubishi UFJ Financial Group climbed 2.6% and Panasonic Holdings gained 3.5%. The Nikkei Stock Average rose 0.1% to 28514.78.

Indian shares ended lower, dragged by tech stocks, after Infosys's weak quarterly results triggered broad selling in the sector. Infosys finished 9.4% lower after its fourth-quarter net profit dropped 7.0% on quarter. HCL Technologies declined 2.7% and Tech Mahindra dropped 5.3%. Gainers included financial stocks and consumption companies. Nestle India was up 4.0% and Bajaj Finance rose 1.0%. The benchmark Sensex was down 0.9% at 59910.75.

Europe

European stocks traded mixed along with US equities as investors looked ahead to a slew of corporate earnings this week. The pan-European Stoxx Europe 600 closed flat, the German DAX fell 0.1% and the French CAC 40 shed 0.3%.

"Stocks have been left bereft this afternoon with little on the calendar today, and ahead of earnings tomorrow," IG analyst Chris Beauchamp wrote. "Muted is perhaps the best way to describe the session, though it will no doubt heat up tomorrow once earnings start to come through thick and fast."

The United Kingdom’s FTSE 100 closed up 0.1% amid hopes that interest rate hikes may end soon. Investors awaited key economic and company figures as earnings season gets underway. "Today has felt a bit like investors on both sides of the pond have been treading water waiting for a barrage of numbers heading our way. From jobs and inflation figures that should help us take the temperature of the UK economy, to trading updates from household names that will give us a clearer global picture, the next few days should be enlightening," AJ Bell analyst Danni Hewson said in a note. IAG was the session's top riser, up 3%, followed by RS Group and Weir Group, up 2.9% and 2.4%, respectively.

North America

US stocks and bond yields rose ahead of a busy week of earnings, with some of the biggest corporations due to report.

After a jolt of volatility in the first quarter, April has brought calm across a range of markets, including stocks, bonds and currencies. The muted moves continued into Monday.

Stocks hugged the flatline for much of the session and turned higher in the final hour before close. The S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite each gained 0.3%.

Swings for individual shares have been larger, particularly for some of the companies reporting results. While big banks kicked off earnings on a strong note last week, analysts expect overall S&P 500 earnings to decline for a second straight quarter, notching the steepest quarterly decline since 2020. Tesla, Johnson & Johnson and Netflix are among the companies reporting this week.

This quarter is set to be the most important one for regional banks in decades, with investors on the lookout for what executives say about the banking crisis and their lending standards moving forward.

On Monday, Charles Schwab and State Street both reported a decline in customer deposits, a sign that interest rates are weighing on banks' balance sheets. Shares in State Street fell 9.2% after it reported lower-than-expected first-quarter earnings. Charles Schwab said its profit rose in the most recent quarter but that deposits continued to fall. Shares of the brokerage firm rose 3.9%.

"We have a pretty conservative view of earnings over the next 12 to 18 months," said Chris Marangi, co-chief investment officer of value for Gabelli Funds.

Investors are also fixated on the outlook for interest rates, with many now widely anticipating another increase at the Federal Reserve's May meeting. This contrasts from a month ago, when stress in the banking industry fueled bets that the Fed would have to cut its rate-raising cycle short. Fed comments last week put rate increases back on the table.

"I think the market has come to terms with the fact that the Fed will be hiking again in May," said Jane Foley, head of foreign-exchange strategy at Rabobank. What happens at Fed meetings in June and beyond remains uncertain, but a lineup of Fed speakers this week may offer some clues, she said.

Some analysts said that investors should be cautious despite the lull in stocks lately. Jake Jolly, head of investment analysis at BNY Mellon Investment Management, said he expects the economy to take a turn for the worse later this year and for US businesses to have a tougher time accessing credit.

"We do think the most likely scenario is a credit crunch," Mr. Jolly said.

In corporate news, Alphabet shares slid 2.7% after The New York Times reported that Google was devising radical search changes to beat back AI rivals.