Hang Seng Index, Nikkei 225, ASX 200: JD.com Earnings Puts the Hang Seng in Focus

US Equity Markets: Producer Prices and Fed Chair Powell

On Tuesday (May 14), US producer prices warranted investor attention, increasing 2.2% year-on-year in April. Producer prices advanced by 1.8% in March. The hotter-than-expected numbers failed to spook investors and the expectations of a September Fed rate cut.

Moreover, Fed Chair Powell discussed the producer price numbers, reportedly describing the report as mixed. Powell focused on downward revisions to the March numbers and indicated that rates may stay higher for longer but are unlikely to increase further.

On Tuesday, the Nasdaq Composite Index advanced by 0.75%. The Dow and S&P 500 saw gains of 0.32% and 0.48%, respectively.

The producer price figures, the Fed Chair Powell speech, and the US equity market session will set the tone for the Wednesday (May 15) Asian session.

Asian Economic Calendar: Aussie Wages, the PBoC, and Earnings in Focus

On Wednesday (May 15), Australian wage growth figures could influence the RBA rate path and buyer appetite for ASX 200-listed stocks.

Economists forecast wages to increase 4.2% year-on-year in Q1 2024 after rising 4.2% in Q4 2023. Hotter-than-expected numbers could fuel speculation about an RBA rate hike and affect buyer demand for rate-sensitive stocks.

The announcement of the PBoC’s 1-year Medium-Term Lending Facility Rate (MLF) also merits attention. An unexpected cut could drive buyer demand for riskier assets. However, economists expect the PBoC to leave the 1-year MLF at 2.5%.

Beyond the Asian economic calendar, investors should track corporate earnings results. Sumitomo Mitsui Financial Group Inc. (8316), Mitsubishi UFJ Financial Group Inc. (8306), and Fortescue Metals (ASX: FMG) are among the big names to release earnings results.

JD.com releases earnings results on Thursday (May 16).

Commodities: Crude Oil, Gold, and Iron Ore

On Tuesday (May 14), gold spot (XAU/USD) gained 0.93% to close the session at $2,357.88. WTI crude oil declined by 1.39%, ending the Tuesday session at $78.02.

On the Singapore Futures Exchange, iron ore prices were down 0.30% on Wednesday (May 15). Iron ore spot slid by 2.55% on Tuesday (May 14).

The USD/JPY and the Nikkei

The USD/JPY gained 0.13% on Tuesday (May 14), ending the session at 156.398. The stronger USD/JPY could drive buyer demand for Nikkei Index-listed export stocks. Nevertheless, investors should monitor for Japanese government intervention threats and BoJ chatter about monetary policy.

The Futures Markets

On Wednesday (May 15), the ASX 200 and the Nikkei Index were up by 36 and 290 points, respectively. The Hang Seng is closed on Wednesday.

ASX 200

The ASX 200 declined by 0.30% on Tuesday (May 14). Tech stocks contributed to the losses, with the S&P/ASX All Tech Index ending the session down 0.53%. Bank, gold, mining, and oil stocks also trended lower.

ANZ Group Holdings Ltd. (ANZ) declined by 0.71%. National Australia Bank Ltd. (NAB) and Westpac Banking Corp. (WBC) saw losses of 0.15% and 0.30%, respectively. However, the Commonwealth Bank of Australia (CBA) bucked the trend, advancing by 0.18%.

Iron ore price losses from Monday pressured mining stocks. BHP Group Ltd (BHP) and Rio Tinto Group Ltd. (RIO) fell by 0.23% and 0.71%, respectively. Fortescue Metals Group Ltd. (FMG) ended the session down 0.92%.

Oil stocks Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) fell by 0.64% and 0.77%, respectively.

Gold-related stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) ended the Tuesday session down 1.22% and 0.26%, respectively.

Hang Seng Index

The Hang Seng Index fell by 0.22% on Tuesday (May 14). It was a mixed session for the real estate and tech sectors. The Hang Seng Tech Index (HSTECH) gained 0.57%, while the Hang Seng Mainland Properties Index (HSMPI) declined by 0.27%.

Alibaba (9988) and Tencent Holdings (0700) saw gains of 1.50% and 3.60%, respectively.

However, bank stocks had another mixed session. HSBC (0005) rose by 1.25%. China Construction Bank (0939) and Industrial Commercial Bank (1398) declined by 1.24% and 1.54%, respectively.

The Nikkei Index

(Graph for reference purposes only)

The Nikkei Index advanced by 0.46% on Tuesday (May 14).

Bank stocks trended higher. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) gained 0.60% and 0.31%, respectively.

However, it was a mixed session for the main components of the Nikkei Index.

Softbank Group Corp. (9984) rallied 4.34% as investors continued to react to Q1 earnings results. Fast Retailing Co. Ltd. (9983) and Sony Group Corporation (6758) saw gains of 0.15% and 0.38%, respectively.

However, Tokyo Electron Ltd. (8035) and KDDI Corp. (9433) declined by 0.14% and 1.39%, respectively.

For upcoming economic events, refer to our economic calendar.