Global stocks lose $7tr since January

Stellar quarterly results for Tesla and Microsoft lead US rally, but Asian stocks lag

US stocks rallied at the opening of yesterday’s trading, led by gains in technology shares, in the wake of Wednesday’s rout that wiped out this year’s gains in benchmark indexes. Yields on Treasuries rose and the dollar strengthened.

Strong earnings results from Twitter, Microsoft and Tesla helped push the S&P 500 Index into positive territory for the first time in seven days. The sentiment was darker in Asia, where shares fell for a third day, with Japan’s Topix index falling to the lowest in more than a year, Bloomberg reports.

“The question is: can we go the distance?” said Donald Selkin, chief market strategist at Newbridge Securities. “You have to see how it goes. We’re maintaining gains so far.”

Losses for world stocks since January are now close to $7 trillion.

Sentiment has been tested in October, with global stocks poised for their worst month in more than six years as the effects of trade tensions and geopolitical uncertainty begin to bite. Investors remain apprehensive as a flood of earnings, while mostly stellar, have come with warnings about the future impact of tariffs and rising costs.

According to Reuters, Microsoft jumped 6.1 per cent after topping consensus estimates for revenue and profit, helped by strong demand for its Azure cloud computing and Office 365 software products. The results, along with gains for chipmakers, lifted technology stocks up 2.32 per cent.

Ford Motor, which is struggling with sales in China, surged 7.4 per cent as its earnings report raised hopes for a strong finish to the year.

Central banks remain in the spotlight, with investors speculating what, if any, impact the market uncertainty will have on policy decisions.

“What makes the latest volatility more troubling is that it’s been difficult to identify one specific cause,” Kerry Craig, global markets strategist at JPMorgan Asset Management, wrote in a note. “Meanwhile, central banks will continue to get top billing as the Fed pushes on with normalising interest rates and the ECB is set to end its bond purchase scheme by year end.” ■ ■ ■