Asian Stocks Edge Up At Open, Bitcoin In Focus: Markets Wrap

Asian shares were off to a cautious start to the week, with a barrage of US economic data and earnings from AI bellwether Nvidia Corp. expected to shape the market narrative.

The MSCI Asia Pacific Index inched up 0.2%, with South Korea's Kospi helping lead gains. Japan's Nikkei 225 fell 0.5% after the economy contracted for the first time in six quarters. Japanese tourism and retail-related stocks slumped amid tensions between China and Japan. US equity-index futures advanced 0.3%.

After weeks of limited data, investors will finally get fresh signals on the health of the US economy as agencies begin releasing key indicators, including the employment figures. Traders are also navigating a mix of factors, including stretched valuations in AI-related stocks, while risk appetite seemed to be fading — Bitcoin has wiped out almost all of its year-to-date advance.

“November so far has seen a pretty wobbly ride for shares,” Shane Oliver, chief economist and head of investment strategy at AMP Ltd., wrote in a note to clients. “Share markets remain at risk of a correction given stretched valuations, risks around US tariffs and the softening US jobs market.” 

A gauge of global equities fell on Friday as uncertainty about Federal Reserve interest-rate cuts and stretched technology valuations weighed on sentiment.

The lofty AI valuations face a crucial test this week as investors look into Nvidia's earnings on Wednesday to assess whether its soaring price tag is sustainable. The company's stock has surged 42% this year, eclipsing returns in the S&P 500 and Nasdaq 100 indexes.

Another key factor for the week is the release of economic data that will provide clues on the Fed's outlook. A slew of Fed officials have expressed skepticism over the need for a cut in December, or outright opposed one, less than a month after Chair Jerome Powell warned that a December cut is far from a “foregone conclusion.” 

Last week, futures traders pushed the odds of a quarter-point rate cut in December below 50% as some Fed officials indicated that such a move is far from a sure thing.

“While there will be questions about data quality, market participants will react to new information” and weigh the dollar, Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note to clients. “We expect the non-farm payrolls report for September to underperform expectations of a 50,000 increase.”

In commodities, oil started the week lower while gold edged up. The precious metal has jumped more than 50% this year, putting it on course for its best annual gain since 1979.

Bullion was trading around $4,100 an ounce on Monday, having lost more than 2% in the previous session. Expectations for another rate cut were scaled back last week as Fed officials showed little conviction for reducing borrowing costs. Lower interest rates typically make non-yielding bullion more appealing to investors.

Attention is also on the cryptocurrencies market. Just a little more than a month after reaching an all-time high, Bitcoin erased the more than 30% gain registered since the start of the year as exuberance over the pro-crypto stance of the Trump administration fades.

Corporate News:

• Samsung Group and SK Group were among four of South Korea's biggest companies that pledged to invest about $550 billion in the country after meeting with President Lee Jae Myung.

• A White House national security memo claimed Alibaba Group Holding Ltd. provided the Chinese military with technology support against targets in the US, the Financial Times reported.

• Boeing Co. said it will ensure its factories are ready to absorb a higher rate of aircraft output before lifting the tempo again next year.

Key Events This Week

For a list of main events click here:

Some of the main moves in markets: 

Stocks

• S&P 500 futures rose 0.3% as of 9:50 a.m. Tokyo time

• Japan's Topix fell 0.4%

• Australia's S&P/ASX 200 fell 0.2%

• Euro Stoxx 50 futures fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.1% to $1.1607

• The Japanese yen was little changed at 154.60 per dollar

• The offshore yuan was little changed at 7.1010 per dollar

Cryptocurrencies

• Bitcoin rose 1.3% to $94,674.14

• Ether rose 1.8% to $3,125.85

Bonds

• The yield on 10-year Treasuries was little changed at 4.15%

• Japan's 10-year yield advanced 1.5 basis points to 1.720%

• Australia's 10-year yield advanced five basis points to 4.49%

Commodities

• West Texas Intermediate crude fell 1% to $59.50 a barrel

• Spot gold rose 0.2% to $4,091.11 an ounce