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Signage for Bank of Korea is displayed atop the central bank's headquarters building in Seoul, South Korea, on Thursday, Aug. 16, 2018. South Korea's central bank hiked interest rates for a second consecutive meeting on Thursday to wrestle consumer inflation down from 13-year highs, and further raised its projections for prices to rise to their highest since 2008.
Jean Chung | Bloomberg | Getty Images
SINGAPORE — Asia-Pacific markets were set to open higher Friday, breaking ranks with Wall Street that saw key benchmarks slide as investors digested a sticky U.S. inflation report for September.
Investors in Asia are also focused on policy decisions from the Bank of Korea on Friday. South Korea's central bank is expected to deliver its first rate cut since March 2022, according to a Reuters poll, bringing down its benchmark interest rate by 25 basis points to 3.25%.
China's Ministry of Finance is scheduled to hold a press conference on Saturday 10 a.m. local time. The highly anticipated briefing session is expected to unveil fresh fiscal stimulus package as Beijing attempts to boost its economy.
Japan's Nikkei 225 appeared set for a stronger open, with the futures contract in Chicago at 39,590 and their counterpart in Osaka at 39,460 against the index's last close of 39,380.89.
Futures for Hong Kong's Hang Seng index stood at 21,274, higher than its previous close of 21,251.98.
Australia's S&P/ASX 200 started the day down 0.19%.
Overnight in the U.S., the S&P 500 lost 0.21% to settle at 5,780.05 while the Dow Jones Industrial Average dropped 0.14% to finish at 42,454.12. The Nasdaq Composite dipped 0.05% to end at 18,282.05.
The U.S. consumer price index rose 0.2% on a monthly basis, bringing the annual inflation growth to 2.4% from the previous year. The inflation figures were higher than forecasts of 0.1% monthly gain and a 2.3% year-over-year rate, according to a Reuters poll.
While the annual inflation rate was the lowest since February 2021, it added to concerns that the Federal Reserve might slow the pace of future rate cuts.
— CNBC's Samantha Subin and Hakyung Kim contributed to this report.
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Fed's Bostic indicates no rate cut in November is possible
Atlanta Federal Reserve President Raphael Bostic said Thursday he would consider holding interest rates steady at the November meeting, or cutting, depending on how the economy unfolds.
"I am totally comfortable with skipping a meeting if the data suggests that's appropriate," Bostic, a voting member this year on the rate-setting Federal Open Market Committee, told The Wall Street Journal.
Reports showing inflation is easing but still away from the Fed's 2% target along with strength in the labor market suggest that "maybe we should take a pause in November," Bostic said, though he added that he would also be open to another quarter-percentage-point reduction.
— Jeff Cox
Oil rallies 3% as Milton causes run on gas stations, market waits for Israel strike
Crude oil futures jumped about 3% on Thursday as Hurricane Milton caused a run on gas stations in Florida and the market waits for Israel to strike Iran.
U.S. crude oil was up $2.71, or 3.7%, at $75.95 per barrel, while global benchmark Brent jumped $2.82, or 3.7%, to $79.42 per barrel.
Nearly 25% of Florida's gas stations are out of fuel after a surge in demand due to people evacuating from the path of Hurricane Milton, according to GasBuddy data.
In the Middle East, Israel's security cabinet was expected to meet Thursday to discuss the country's response to Iran's ballistic missile attack last week.
Traders fear Israel could hit Iran's oil facilities, though President Joe Biden has discouraged such a move and the Gulf Arab states are reportedly lobbying the White House to pressure Israel to spare energy infrastructure.
— Spencer Kimball
UBS forecasts signs of 'near-term softening' this quarterly earnings season
Quarterly earnings could see some softness this time around, according to UBS.
"Over the past 3 quarters, S&P 500 EPS growth has come in above the long-term average, and is expected to remain robust through year-end 2025 and beyond," chief U.S. equity strategist Jonathan Golub said. "That said, there are signs of near-term softening worth noting."
"This forecasted softness is broad-based, with growth slower in 8 of 11 sectors and 66% of companies," he added.
According to Golub, third-quarter earnings per share are forecast to have grown 4% compared to 11.6% in this second quarter. This growth should ultimately finish closer to 7.5% after surprises, he said, noting that would represent a deceleration from the prior quarter.
Looking only at Big Tech's diminishing contributions to the broader market's growth, Golub noted that the six megacap tech names grew their earnings per share by 68.2% in the fourth quarter of 2023, but are expected to grow 19.3% this quarter.
— Pia Singh
Jobless claims spike likely tied to storm, Boeing strike
A spike in jobless claims last week is likely tied to distortions from Hurricane Helene as well as the Boeing strike affecting workers in Michigan.
Initial filings for unemployment benefits jumped to 258,000, an increase of 33,000 from the previous week, well above the estimate for 230,000 and the highest since August 2023. However, nearly all of the gain can be traced to storm-hit states Florida and North Carolina, as well as Michigan, which is feeling the brunt of the Boeing strike by 33,000 workers.
What's more, this could be just the beginning of exogenous factors hitting the employment numbers, said Joseph Brusuelas, chief economist at RSM.
"The sharp increase in jobless claims this morning was linked to hurricane-related distortions and was the tip of the spear with respect to the distortions to critical economic data in the near term," Brusuelas said.
— Jeff Cox
The S&P 500 typically rises during earnings season
The S&P 500 is near an all-time high, but it could see further upside with the upcoming earnings season, according to Oppenheimer.
The broad market index on Wednesday notched a fresh record close, a milestone that indicates the outlook for the benchmark continues to be rosy. On Thursday, it was last just slightly off its high.
But the ramp-up of earnings season could mean further gains. On a median basis, the S&P 500 gains 2% in the first four weeks of reporting, according to the technology, media and telecommunications desk at Oppenheimer.
The third-quarter earnings season unofficially kicks off Friday, with JPMorgan Chase and Wells Fargo due out before the open.
— Sarah Min
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