Markets Insights

STI may ride on US market's weekend cheer

Texas residents evacuating during Hurricane Harvey in August. Businesses that reopened after the devastation inflicted by hurricanes Harvey and Irma boosted the number of new jobs in the US. The jobless rate fell to 4.1 per cent - the lowest since De
Texas residents evacuating during Hurricane Harvey in August. Businesses that reopened after the devastation inflicted by hurricanes Harvey and Irma boosted the number of new jobs in the US. The jobless rate fell to 4.1 per cent - the lowest since December 2000.PHOTO: AGENCE FRANCE-PRESSE

Apple's rise helped boost major Wall Street indexes, as positive US job data adds to rosy outlook

With key United States data and announcements out of the way and the US earnings season tapering, it might appear that the week ahead would be much lighter.

But markets would likely be waiting for Asia earnings that will flow in through the week, as well as data coming out of China, among other things.

Local investors would be paying close attention to Singapore's largest bank, DBS Group Holdings, as the lender is slated to announce its financials today and possibly set the tone for the week.

The benchmark Straits Times Index (STI) could be off to a positive start when it opens, riding on the record highs of Wall Street.

Over the weekend, a surge in heavyweight Apple, whose stock rose 2.6 per cent, helped push up all three major Wall Street indexes.

Adding to the cheer was the data that showed the US economy added 261,000 new jobs last month, as businesses reopened in the wake of hurricanes Harvey and Irma.

The jobless rate fell to 4.1 per cent - the lowest since December 2000.

  • 261,000

    Number of new jobs added to the United States economy last month.

Sentiment was also further boosted by an Institute for Supply Management report that showed record growth in the service sector last month. On Thursday, developers City Developments and UOL Group are scheduled to release their earnings.

Markets would also likely be on the lookout for the slew of earnings reports to come in from Japan and Hong Kong in the week.

The pickup in earnings reporting in the region contrasts with that in the US, where about one-tenth of the companies on the S&P 500 index are to release their financials.

Ms Pan Jingyi, an analyst at IG, said in her note that the key economic data in the region this week would likely be the set from China.

"Following the moderation in China's official manufacturing purchasing managers' index, underpinned by environmental regulatory changes surrounding the 19th National Party Congress, the market will examine the impact it has on October trade and producer price index figures, due Wednesday and Thursday respectively."

Another thing to look out for would be the third-quarter gross domestic product figures of the region, including Indonesia and Hong Kong.

"No changes to monetary policy have been expected from the handful of central bank meetings in Australia, Malaysia and the Philippines. For the local Singapore market, retail sales performance dating back to September remains the sole tier-2 release," said Ms Pan.

Over in the US, she noted that a sparse economic calendar is seen ahead for the US market, with tomorrow's job openings data and Friday's University of Michigan consumer sentiment index likely to be the most-watched ones.

"A moderation to the latter had been pencilled in by the market, though it is still expected (to be) at the 100 mark.

"Investors will likely be watching this number for any changes to consumers' perception on the US economic outlook," Ms Pan said.

What could perhaps be of more interest to investors would be US President Donald Trump's first official visit to the region, where he is expected to make several stops, including in Japan, South Korea and China, to strengthen business and diplomatic ties, besides sending a message to US allies on the North Korean nuclear crisis.

A version of this article appeared in the print edition of The Straits Times on November 06, 2017, with the headline 'STI may ride on US market's weekend cheer'. Print Edition | Subscribe