MARKET WRAPS

Watch For:

ISM Report on Business Manufacturing for October; earnings from Pfizer, Mondelez

Opening Call:

Today's Headlines:

-Hong Kong Shares Jump on China Reopening Hopes

-RBA Raises Rates, Maintains Hawkish Guidance

-China's Private Manufacturing Improves, Still Contracting

Follow WSJ markets coverage here .

Stock futures on Tuesday pointed to a positive start to the month as the earnings season trundled on and as traders jostled for position ahead of Wednesday's Federal Reserve interest rate decision.

The Fed is expected to raise rates by 75 basis points to a range of 3.75% to 4%. Economic data for it to consider before then include on Tuesday the S&P manufacturing PMI for October, due at 9:45 a.m. and the ISM manufacturing index for October at 10 a.m. The jobs openings reports will also be published at 10 a.m.

Fundstrat said that Monday's mild sell-off did not detract from what had been a "stellar month" for the market.

"The combination of negative sentiment, bullish mid-term seasonality and some positive cycles gave plenty of warnings that October might live up to its billing as a 'Bear-Killer' month."

But it warned: "The question remains, will the Fed spook investors on Wednesday, or deliver a warm 'trick or treat' dovish surprise that could help this rally to extend further?"

In Asia, Hong Kong stocks surged, after rumors circulated on social media that China was considering easing its strict Covid-19 policies.

The benchmark Hang Seng Index closed up 5.2%, while the Hang Seng Tech Index jumped 7.8%. China's onshore Shanghai Composite index rose 2.6%, while the CSI 300 was up 3.6%.

The rally was fueled by an anonymous post that circulated on Chinese social media, claiming that the country's government was considering easing Covid-19 restrictions in March. China's strict zero-Covid policy has taken a heavy toll on the economy this year.

Read: Hong Kong Stocks Soar, But Lasting Gains Aren't Here Yet

Forex:

The dollar turned lower as European equities started the day with gains of around 1%, causing demand for safe-haven assets to ebb.

Analysts pointed to a solid Asian session, with stocks boosted on speculation that China may relax its zero-Covid policy.

"The Chinese city of Zhengzhou is reportedly looking to lift their Covid controls for low-risk regions, and there's speculation that China is establishing a reopening committee. Asian equities jumped and the dollar fell," Mizuho said.

Trade in the dollar remained volatile as traders awaited Wednesday's Federal Reserve interest-rate decision.

Energy:

Oil prices were close to 2% higher in Europe on a weaker dollar and as rumors circulated in Asia that a Chinese reopening committee has been formed, helping to lift sentiment that demand for various goods will pick up in the new year.

SPI Asset Management said that although the oil market looks to be trading on the current recessionary environment, China is an upside driver of oil demand and a reopening would accelerate this trend.

Metals:

Base metals pushed solidly higher in European trading on rumors of a possible reopening of China from its strict Covid-19 protocols. Gold also made modest gains.

Marex said copper traded strongly in Asia, initially on forex moves, but later driven by chatter that a reopening committee has been formed, led by Wang Huning, a Politburo standing member.

Marex cautioned however, that nothing had been confirmed, and with the Fed policy decision due later this week, it would be challenging to forecast when prices will rise.


TODAY'S TOP HEADLINES


BP Profit Boosted by Natural-Gas Trading, to Buy Back More Shares

LONDON-BP PLC reported robust underlying profit for the third quarter and said it would buy back another $2.5 billion of shares, as a strong performance in natural-gas trading offset weaker refining margins.

London-based BP said Tuesday its underlying replacement-cost profit, a metric similar to the net income that U.S. oil companies report, was $8.2 billion. That beat the $6.1 billion average projection of 29 analysts compiled by BP and the $3.3 billion it reported a year earlier.


Saudi Aramco Profit Jumps 39% on High Oil Prices

Saudi Arabia's national oil company posted a 39% jump in quarterly profit on Tuesday, as high oil prices boosted earnings that help the kingdom pay for an ambitious economic transformation plan at home and expand its diplomatic influence in the region.

Aramco, officially named Saudi Arabian Oil Co., said its net income amounted to $42.43 billion in the three months ending in September, up from $30.43 billion in the same period a year earlier, driven by higher crude-oil prices and volumes sold.


Penguin Random House Blocked From Acquiring Rival Publisher Simon & Schuster

A federal judge on Monday blocked Penguin Random House from acquiring rival book publisher Simon & Schuster for about $2.18 billion, agreeing with the Justice Department that the planned merger would unlawfully lessen competition.

U.S. District Judge Florence Pan accepted the Justice Department's arguments that some writers would likely be harmed if Penguin Random House, the world's largest consumer-book publisher, was allowed to acquire another of the five largest book publishers in the U.S.


Chip Shortages Still Plague Toyota, Other Auto Makers

TOKYO-Toyota Motor Corp. said it still can't get its hands on enough semiconductors to meet its production goals, despite signs of excess supply elsewhere in the chip business.

Toyota on Tuesday lowered its production target for the current fiscal year through March to 9.2 million units from a previous goal of 9.7 million units, citing a shortage of automotive chips.


Sony's Second-Quarter Profit Rose on Strength of Music, Electronics Businesses

Sony Group Corp.'s second-quarter net profit rose 24% from a year earlier on the strength of its music and electronics businesses, the company said Tuesday as it boosted its fiscal-year guidance.

The Japanese electronics and entertainment group said that net profit for the quarter ended Sept. 30 rose to 263.96 billion yen ($1.77 billion) from Y213.11 billion a year earlier. That beat the estimate of Y218.50 billion in a poll of analysts by Quick.


Elon Musk Is Forming Circle of Advisers as He Reimagines Twitter

Elon Musk is quickly setting to work a group of advisers, investors and employees from elsewhere in his business empire to help him reimagine Twitter Inc. in his first days as its new owner.

The group is working on a range of initiatives to try to bolster the platform's user experience and revenue, according to people involved in the effort, while Mr. Musk continued to publicly float potential changes in a series of tweets.


Hong Kong Stocks Soar, But Lasting Gains Aren't Here Yet -- Analysis

Hong Kong stocks are beginning November with a bang on reopening rumors and hopes for a dovish Federal Reserve, but a long-term rebound is unlikely to take shape until China's macroeconomic outlook turns a corner, analysts say.

The Hang Seng Index gained as much as 6.4% in Tuesday trade before closing 5.2% higher, marking one of its biggest gains of the year. The rise, coming after the index on Monday dropped to its lowest point since the 2009 global financial crisis, was led by tech giants, with the Hang Seng Tech Index at one point up as much as 9.3%. It closed 7.8% higher, with heavyweights Meituan, Tencent Holdings Ltd. and Alibaba Group Holding Ltd. gaining 12%, 11% and 7.6%, respectively.


RBA Raises Rates by a Further 25 Bps, Maintains Hawkish Guidance

SYDNEY-The Reserve Bank of Australia continued to raise interest rates at a cautious pace this month despite data showing inflation ran at its fastest pace in 32 years in the third quarter, with more dire numbers likely in coming months.

The RBA on Tuesday raised the official cash rate by 25 basis points to 2.85%, while indicating a willingness to continue moving rates higher in coming months.


China's Private Manufacturing Improves but Still Contracting

A private gauge of activity in China's manufacturing sector remained in contraction territory for a third straight month in October, as Covid-19 containment measures weighed on both output and demand.

The China Caixin manufacturing purchasing managers index rose to 49.2 from 48.1 in September, according to data released Tuesday by Caixin Media Co. and S&P Global.


U.S. Plans to Send B-52 Bombers to Australia in Effort to Counter China

SYDNEY-The U.S. is laying the groundwork for further deployment of long-range B-52 bombers in strategic northern Australia, drawing criticism from China, which warns the move could spark an arms race in the region.

A new, U.S.-funded aircraft-parking apron at an Australian air force base near the town of Katherine will be able to accommodate up to six B-52 aircraft, a spokesperson for Australia's defense department said. The upgrade could also be used by other aircraft and will enhance Australia's capacity to train with other allies, the spokesperson said.


Israelis Head to Polls in Fifth Election Since 2019

TEL AVIV-A deeply divided Israeli electorate is casting ballots Tuesday in the nation's fifth election since 2019, with polls predicting an extremely tight vote that gives neither Prime Minister Yair Lapid nor opposition leader Benjamin Netanyahu a clear path to power.

Some of the most recent polls showed Mr. Netanyahu's right-wing coalition with a slight edge of 61 seats needed for a majority in the 120-seat parliament, the Knesset. Other polls showed a 60-60 tie. Mr. Lapid, leader of the centrist Yesh Atid party, is polling at around 27 seats. Pollsters give his largely center-left coalition around 56 seats.


China Docks Final Module to Space Station

HONG KONG-China has successfully docked the final module to its space station, marking a milestone in Beijing's long-coveted ambition of becoming a world-leading space power.

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