Australia

Australian shares are poised to edge lower at market open. US stocks showed slight gains, breaking a four day losing streak and bond yields rising higher.

ASX futures were down 7 points or 0.1% to 7111 as of 8:00am on Tuesday, pointing to a fall at the open.

US stocks ended with small gains, breaking a four-day losing streak, as the 10-year Treasury yield topped at 4.5% and risk averse investors worry the Fed's pledge to hold rates higher for longer could spur the economy into a recession.

Bond yields continued upward, with the yield on the benchmark 10-year Treasury settling at the highest level since 2007.

Stock markets edged higher on Monday after major indexes had their worst weekly performance since March. The S&P 500 rose 0.4% while the tech-heavy Nasdaq Composite added 0.5%. The blue-chip Dow Jones Industrial Average gained 0.1%, or 43 points.
Markets are awaiting more data later this week including and updated reading of 2Q GDP and as well as consumer-spending data and the Federal Reserve's preferred inflation gauge. Energy stocks outperformed, despite a slight fall in oil prices, while consumer staples were the weakest S&P 500 sector.

The 10-year Treasury yield rose 0.103 percentage point to settle at 4.541%, up from 4.438% on Friday. The yield has risen and prices have declined in 15 of the past 20 weeks, according to Dow Jones Market Data.

Investors watch movements in the 10-year carefully because the yield is a key benchmark for household and borrowing costs. Higher yields on safe assets such as government bonds make riskier assets like stocks look comparatively less attractive.

In commodity markets, Brent crude oil remained relatively flat gaining 0.02% to $US93.29 a barrel, Gold was unchanged at US$1,919.19 and Iron ore fell by 4.2% to $US116.05 a tonne.

In local bond markets, the yield on Australian 2 Year government bonds remained flat at 4.02% while the 10 Year also remained flat at 4.31%. Overseas, the yield on 2 Year US Treasury notes was unchanged at 5.12% and the yield on the 10 Year US Treasury notes gained to 4.53%.

The Australian dollar slid marginally to 64.18 US cents from its previous close of 64.23 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies was flat at 99.96.

Asia

Chinese shares closed lower amid cautious mood ahead of the country's Golden Week holiday. Goldman Sachs analysts say its offshore clients remain bearish on the Chinese economy, while onshore clients have mixed views. Financials and developers led the session's losses. CITIC Securities fell 3.1% and East Money Information declined 2.3%. Poly Developments & Holdings Group dropped 3.4% and China Vanke was 1.9% lower. Pharmaceutical stocks gained with Jiangsu Hengrui Medicine up 1.8%. The benchmark Shanghai Composite Index closed 0.5% lower at 3115.61, the Shenzhen Composite Index also fell 0.5% while the tech-heavy ChiNext Price Index declined 0.4%.

Hong Kong shares closed lower, weighed by Chinese property companies and casino stocks. The Hang Seng Index fell 1.8% to 17729.29. China Evergrande scrapping its restructuring plan last Friday stoked concerns over mainland property developers. The Hang Seng Mainland Properties Index dropped 4.2%. China Evergrande plunged 22%, Longfor Group dropped 6.5% and Country Garden Services lost 4.3%. Meanwhile, casino operators Galaxy Entertainment and Sands China dropped 5.4% and 5.2%, respectively. Among the few gainers, Wuxi Biologics added 2.5% and Orient Overseas rose 1.7%.

Japanese stocks ended higher, led by gains in electronics and tech stocks, as concerns eased about the Bank of Japan's possible shift to a tighter policy. Advantest gained 3.9% and SoftBank Group climbed 3.6%. Daiichi Sankyo advanced 7.6% following positive results from a phase 3 trial for breast cancer drug Datopotamab Deruxtecan. The Nikkei Stock Average rose 0.9% to 32678.62. The 10-year Japanese government bond yield fell 1.5 bps to 0.725%. Investors are focusing on any comments on the yen's recent weakness by Japanese government officials.

Indian shares ended flat as gains in financial stocks helped offset losses in technology shares. Global macroeconomic factors are key risks for the local stock market in the short term amid concerns over higher U.S. inflation and the protracted slowdown in Chinese consumption, analysts from ICICI Securities write in an email. Bajaj Finance led gains and advanced 4.6%, while Kotak Mahindra Bank was 1.6% higher. Meanwhile, tech and automobile shares led losses. Infosys fell 1.4% and Wipro dropped 1.1% Carmaker Mahindra & Mahindra was 1.2% lower and Tata Motors retreated 0.4%. The benchmark Sensex closed 0.02% lower at 66023.69.

Europe

European stocks dropped after mixed Asia trading and ahead of an expected slightly lower US open. The Stoxx Pan-Europe 600, French CAC 40 and FTSE 100 retreat 0.5% and the German DAX backtracks 0.7%. Brent crude gained 0.2% to $92.13 a barrel, though metal prices dropped, mining stocks lost ground and mainland Chinese and Hong Kong shares fell following downbeat news from China's property sector. "Evergrande is back centre stage after saying it was struggling with its debt-restructuring plan following poorer-than-expected sales, causing its shares to dive and taking the Hang Seng index down for the ride," AJ Bell investment director Russ Mould writes.

The FTSE 100 index closed 0.78% lower on Monday at 7,623.99 points as concerns around sticky inflation and low growth pushed yields higher and equity markets lower. Alongside this, worries over China's property sector are prompting weakness over basic resources and weighing on Asia-exposed companies on London's blue-chip index, CMC Markets U.K. analyst Michael Hewson writes. "Rising yields and a worsening economic outlook is a dangerous cocktail for the FTSE 100," IG analyst Chris Beauchamp says, noting that both growth stocks and usual dividend players are hit as higher yields makes them look less attractive.

North America

US stocks ended with small gains, breaking a four-day losing streak, as the 10-year Treasury yield topped at 4.5% and risk averse investors worry the Fed's pledge to hold rates higher for longer could spur the economy into a recession.

Bond yields continued upward, with the yield on the benchmark 10-year Treasury settling at the highest level since 2007.

Stock markets edged higher on Monday after major indexes had their worst weekly performance since March. The S&P 500 rose 0.4% while the tech-heavy Nasdaq Composite added 0.5%. The blue-chip Dow Jones Industrial Average gained 0.1%, or 43 points.
Markets are awaiting more data later this week including and updated reading of 2Q GDP and as well as consumer-spending data and the Federal Reserve's preferred inflation gauge. Energy stocks outperformed, despite a slight fall in oil prices, while consumer staples were the weakest S&P 500 sector.

The 10-year Treasury yield rose 0.103 percentage point to settle at 4.541%, up from 4.438% on Friday. The yield has risen and prices have declined in 15 of the past 20 weeks, according to Dow Jones Market Data.

Investors watch movements in the 10-year carefully because the yield is a key benchmark for household and borrowing costs. Higher yields on safe assets such as government bonds make riskier assets like stocks look comparatively less attractive.

"With rates getting to the level they are, you've got to think it's going to impact the economy, and I think the market is coming around tothat point of view," said Emerson Ham III, senior partner at Sound View Wealth Advisors.

"The good news out there in the marketplace is you can get decent yields on fixed income," he said, adding that he finds municipal and corporate bonds to both be attractive investments at current prices.

The Federal Reserve opted to hold interest rates steady at the central bank's policy meeting last week. But officials also signaled they expect to keep rates higher further into 2024, a prospect which has rattled investors.

"Investor narratives have shifted quickly to a wall of worry," said Lauren Goodwin, economist and director of portfolio strategy at New York Life Investments. "From my perspective, the biggest risk is inflation firming."

Economists fear that rising oil prices and the possibility of sustained higher borrowing costs will push Americans to trim spending on dining out, travel and other discretionary categories.

Brent crude futures settled at $93.29 a barrel, up slightly. Oil prices have risen 7.4% so far this month.

Energy stocks advanced 1.3%, Monday's best-performing sector within the S&P 500.
Fresh economic data out later this week could offer clues about how higher rates are affecting economic activity. An updated reading for second-quarter gross domestic product is due Thursday. Consumer-spending data and a reading from the Federal Reserve's preferred inflation gauge are expected Friday. Retailers Nike and Costco, as well as cruise-line operator Carnival, are among the companies slated to report earnings this week.

Stocks have rallied this year, but have lost steam of late. The S&P 500 has gained 13% so far in 2023, while the Nasdaq Composite has jumped 27%. But the broad index and Nasdaq have lost 3.8% and 5.4%, respectively, so far in September.

Shares of Warner Bros Discovery fell 4% Monday after Hollywood writers, studios and streamers said they reached a tentative agreement to end a monthslong strike. Netflix shares advanced 1.3%.