JSE faces positive Asian markets on Tuesday as focus shifts to corporate earnings

The JSE opens to positive Asian markets on Tuesday morning, after a tough start to the week, which followed some disappointing economic news out of China.

Surging energy costs, supply-chain disruptions, and regulatory interventions had all dampened the outlook for the world’s second largest economy, whose third-quarter GDP performance was below market expectations,

There is also focus on the US, where companies are reporting third-quarter earnings, with data group FactSect saying on Friday that with 8% of companies on the S&P 500 having reported, 80% had beat earnings expectations, while 83% had beat revenue expectations.

Activity in the US bond market this week, where yields on longer-dated bonds were not rising as much as shorter-dated ones, indicated the market was assuming the US Federal Reserve had longer-term inflation under control, Oanda senior market analyst Jeffrey Halley said in a note.

“Famous last words if any. Nevertheless, it’s as good a reason to be positive on stocks as any now, while we wait for further third quarter US earning’s releases,” said Halley.

Companies reporting on Tuesday include Netflix, and Johnson & Johnson.

In morning trade, the Hang Seng was up 1.18% and the Shanghai Composite 0.7%, while Japan’s Nikkei gained 0.8%. Tencent, which can influence the JSE via the Naspers stable, fell 0.56%.

Gold was 0.61% higher at $1,775.05/oz, while platinum rose 1.15% to $1,048.01. Brent crude rose 0.25% to $84.38 a barrel.

The rand had firmed 0.29% to R14.62/$, but was also trading 0.18% lower at R17.04/€.

There is little on the local corporate and local calendar on Tuesday, but Combined Motor Holdings is expected to report a rebound in headline earnings per share in its six months to end-August, though it did not go into details in a recent trading update.

gernetzkyk@businesslive.co.za