Australia

Australian shares are set to rise at the open, as Wall St responded favourably to key corporate forecasts surprising to the upside.

ASX futures were up 0.4% or 24 points as of 8:00am on Wednesday, suggesting a higher open.

The three major US stock indexes opened in the green and didn't look back. The Dow Jones Industrial Average edged higher 0.6%, about 200 points. The S&P 500 climbed 0.7% while the tech-heavy Nasdaq Composite rose 0.9%.

Wall Street is hoping that companies can reverse three quarters of year-over-year declines in profits that have weighed on stock valuations. Firms' projections, meanwhile, could provide hints about if and when the Fed's interest-rate hikes will begin to weaken the US economy.

Dramatic swings in government bonds in recent weeks have raised Americans' borrowing costs and complicated investors' outlook for when the central bank may lower rates, rattling financial markets. The benchmark 10-year Treasury yield stabilized Tuesday at 4.840%.

That helped lift the shares of all but one of the "Magnificent Seven" technology companies that powered a rally in the first-half of this year. Meta Platforms ticked 0.5% lower after a coalition of 41 states and the District of Columbia alleged in lawsuits that the company built addictive features that harm young users in Facebook and Instagram.

In commodity markets, Brent crude oil fell 2.0% to US$88.00 a barrel while gold was flat at US$1,970.98.

In local bond markets, the yield on Australian 2 Year government bonds was lower at 4.21% while the 10 Year yield was also lower at 4.68%. US Treasury notes were mixed, with the 2 Year yield higher at 5.11% and the 10 Year yield stabilizing at 4.84%.

The Australian dollar hit 63.53 US cents up from the previous close of 63.35. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.44.

Asia

Chinese shares ended higher, with the benchmark Shanghai Composite Index snapping a four-session losing streak. The index rose 0.8% to 2962.24, while the Shenzhen Composite Index gained 1.4% and the tech-heavy ChiNext Price Index added 0.85%. Sentiment was likely buoyed after a Chinese state fund said it had bought ETFs and will continue to increase its holdings. CICC analysts said in a research note that the action by Central Huijin Investment sends a positive signal, and should support the market outlook. Household, personal-care and financial stocks led the gains. Proya Cosmetics rose 8.4% and Yunnan Botanee Biotechnology advanced 1.7%. Citic Securities put on 2.1% and East Money Information was 3.1% higher. ZTE fell 6.4% after 3Q profit growth slowed and revenue fell.

Hong Kong shares hit their lowest closing level in 11 months, with the benchmark Hang Seng Index falling 1.05% to 16991.53. The Hang Seng Tech Index declined 1.1%. Investors are awaiting the policy address from Hong Kong Chief Executive John Lee, who is expected to announce demand-side management measures for the property market and cash handouts to encourage couples to have children, OCBC analysts say in a note. The property sector and tech companies led the losses. Longfor Group was down 3.95% and New World Development lost 3.1%. JD Health International shed 3.5% and Xiaomi fell 2.6%. Pharmaceutical stocks gave the market some support, with Hansoh Pharmaceutical Group advancing 12% and CSPC Pharmaceutical Group adding 3.2%.

Japanese stocks ended higher, led by tech and retail shares, as concerns about borrowing costs recede for now. SoftBank Group gained 1.7%, Fast Retailing climbed 1.7% and Shiseido advanced 3.4%. The Nikkei Stock Average rose 0.2% to 31062.35. Japanese government bond yields fell across the yield curve, with the 10-year yield dropping 2 bps to 0.840%. Investors are focusing on earnings and the latest developments in the war between Hamas and Israel.

Indian markets were closed for a public holiday.

Europe

European stocks mostly rose as investors shrug off downbeat economic data, though worries about Middle-East unrest continue to weigh. The Stoxx Europe 600 gained 1.9%, the DAX up 0.5% and the CAC 40 climbed 0.6%. An economic downturn in the eurozone accelerated at the start of the fourth quarter, according to HCOB provisional PMI survey data for October, though price pressures eased. Meanwhile, UK private-sector output declined for the third month running in October, S&P Global/CIPS PMI data showed.

The FTSE 100 closed up 0.2% with risk appetite recovering as investors await tech earnings later in the day, in additing to some easing in bond yields, IG analyst Chris Beauchamp said in a note. "The mood was strengthened by figures from Verizon, which reported solid 3Q figures and raised its cash flow guidance... We are now firmly into the strong 4Q seasonal period for stocks, providing bulls with their best hope for a sustained rally in months," Beauchamp says. Rio Tinto was the session's highest riser, up 3.5%, followed by AstraZeneca and United Utilities, up 3.35% and 2.6% respectively.

North America

Makers of everything from Post-it Notes to jet engines to business software clued in Wall Street Tuesday on their 2023 outlooks. Markets were cautiously optimistic.

The three major stock indexes opened in the green and didn't look back. The Dow Jones Industrial Average edged higher 0.6%, about 200 points. The S&P 500 climbed 0.7% while the tech-heavy Nasdaq Composite rose 0.9%.

Wall Street is hoping that companies can reverse three quarters of year-over-year declines in profits that have weighed on stock valuations. Firms' projections, meanwhile, could provide hints about if and when the Fed's interest-rate hikes will begin to weaken the US economy.

Dramatic swings in government bonds in recent weeks have raised Americans' borrowing costs and complicated investors' outlook for when the central bank may lower rates, rattling financial markets. The benchmark 10-year Treasury yield stabilized Tuesday at 4.840%.

That helped lift the shares of all but one of the "Magnificent Seven" technology companies that powered a rally in the first-half of this year. Meta Platforms ticked 0.5% lower after a coalition of 41 states and the District of Columbia alleged in lawsuits that the company built addictive features that harm young users in Facebook and Instagram.

Traders are closely watching big tech as bellwethers while they weigh whether to keep money in stocks or to snap up ultrasafe US government bonds. On Tuesday, Microsoft and Google-owner Alphabet stocks both posted gains but diverged in after-hours trading. Microsoft shares extended their rally after better-than-expected earnings, while Alphabet slipped despite them.

Some equity investors hope strong tech earnings and projections could foreshadow a more bullish end of the year.

"These are companies that people don't want to stop buying from or can't stop buying from," said Victoria D. Bills, chief investment strategist at Banrion Capital Management.

The market's grind upward Tuesday spanned every sector of the S&P 500, aside from energy, where lower oil prices weighed on businesses' prospects. Although uncertainty around the Israel-Hamas war drove up crude prices earlier this month, benchmark US futures have fallen for three straight days, to $83.74 a barrel, as traders parse a hazy outlook for fuel consumption.

In one of the sector's first major earnings reports, oil-field services firm Halliburton posted better-than-expected profit from strong international drilling demand and lower-than-anticipated growth. Shares slipped by 3.4%.

Chevron stock, meanwhile, extended its declines for the second straight day after the company announced its $53 billion purchase of oil-producer Hess.

So far, firms' results have largely exceeded Wall Street's expectations. About 81% of the 118 companies in the S&P 500 that reported as of Tuesday morning beat analysts' estimates, according to data firm Refinitiv. That is compared with a 67% average since 1994.

Key corporate forecasts on Tuesday also surprised to the upside. Scotch-tape producer 3M rose 5.3% after it boosted its earnings projections while Coca-Cola rose 2.9% after similarly bumping up its forward-looking estimates. General Electric jumped 6.5% after it raised its outlook and said it would spin off its power business in the spring.

For RTX, formerly known as Raytheon Technologies, $10 billion in new stock buybacks cushioned the blow of a quarterly loss from compensation and repairs linked to faulty geared turbofan engines. Shares in the aerospace and defense firm jumped 7.2%.

The market's biggest mover was Verizon, whose 9.3% leap upward led the Dow and S&P 500 after the telecom giant said it expected to pump out more $1 billion more cash this year than previously anticipated.

Analysts believe more big companies will have to rack up such performances to put the stock market's faltering rally on firmer footing.

A shrinking pool of investors is still holding out hope for a return to the easy money policies that helped catapult speculative investments to monster stock valuations in recent years. But many others, including Simeon Hyman, global investment strategist at ProShares, believe the US is returning to the pre-financial crisis paradigm of higher borrowing costs.

"It ain't gonna get much worse from our perspective," Hyman said of the interplay between monetary policy and financial markets. "But neither will there be a tailwind."