Global Shares Rise Ahead of US-China Summit and Data Releases

Global shares were mostly higher on Tuesday as investors awaited potentially market-moving developments, including a U.S.-China summit and data releases in the U.S., Japan, and China. Futures edged higher, and oil prices also logged modest gains. President Joe Biden is scheduled to meet with Chinese leader Xi Jinping later this week on the sidelines of a Pacific Rim summit in California. This face-to-face meeting will be the first in a year between the leaders of the world's two biggest economies.

Investors are also eagerly awaiting an update on consumer inflation in the U.S. Economists expect the data to show that consumers paid prices that were 3.3% higher in October compared to a year earlier, down from September's inflation rate of 3.7%. The outcome of this report could have implications for the Federal Reserve's decision-making regarding interest rates.

In Asian trading, Japan's benchmark Nikkei 225 gained 0.3% to finish at 32,695.93. Australia's S&P/ASX 200 advanced 0.8% to 7,006.70, and South Korea's Kospi added 1.2% to 2,433.25. However, Hong Kong's Hang Seng lost nearly 0.2% to 17,396.86, while the Shanghai Composite edged up 0.3% to 3,056.07.

Stephen Innes, managing partner at SPI Asset Management, commented on the market sentiment, stating that "Asian stocks gained ground as investors awaited U.S. inflation figures, hoping to confirm that interest rates have peaked. Meanwhile, positive geopolitical sentiments filled the backdrop as investors looked forward to anticipated talks between the U.S. and China."

China is also set to release its monthly economic indicators on Wednesday, providing further insights into the state of the world's second-largest economy. Additionally, Japan will announce its latest growth numbers.

On Monday, Wall Street closed with mixed results. The S&P 500 slipped 0.1%, while the Dow industrials gained 0.2%, and the Nasdaq composite fell 0.2%. The market is currently grappling with central questions surrounding the Federal Reserve's rate hikes and the economy's resilience. This week's reports, including the inflation update and earnings releases from major retailers, may provide more clarity on these matters.

Henry Schein, a provider of healthcare products, beat Wall Street's forecasts, leading to a 7% rise in its stock. However, Tyson Foods, despite exceeding expectations for adjusted earnings, saw its stock fall 2.3% after warning of potential challenges ahead. Tyson stated that its beef division could face losses in the upcoming fiscal year, and its pork unit may break even. The company expects overall revenue, including chicken sales, to remain roughly flat.

Looking ahead, investors are closely monitoring inflation figures. The hope is that inflation will continue to cool from its peak in the summer of 2022, when it reached over 9%, thereby signaling to the Federal Reserve that further interest rate hikes are unnecessary. This, in turn, could accelerate the timeline for potential cuts to interest rates.

Federal Reserve Chair Jerome Powell recently suggested that the rise in longer-term Treasury yields could act as substitutes for future rate hikes. However, Powell indicated that the Fed would not hesitate to raise rates again if needed. The bond market also experienced some movement, with the yield on the 10-year Treasury slightly increasing.

In currency trading, the U.S. dollar slipped against the Japanese yen, while the euro rose.

Overall, the global market outlook remains uncertain as investors await further developments and data releases. The outcome of the U.S.-China summit, inflation figures, and economic indicators from China and Japan will likely shape market sentiment in the coming days.