Asia markets set to mostly extend gains on rate cut optimism; RBA decision in focus – NBC

This is CNBC’s live blog covering Asia-Pacific markets.

Asia-Pacific markets were set to extend gains from the previous session as Wall Street rose overnight on expectations that the Federal Reserve will cuts interest rates.

In Asia, investors await the Reserve Bank of Australia decision on rates as the bank concludes its two-day monetary policy meeting. Economists polled by Reuters expect the RBA to hold its benchmark lending rate at 4.35% for its fourth meeting in a row.

Futures for the S&P/ASX 200 point to a stronger open at 7,734 compared with its last close of 7,682.4.

Japan’s Nikkei 225 is also set to rise, with the futures contract in Chicago at 38,955 and its counterpart in Osaka at 38,900 against the index’s last close of 38,236.07.

However, futures for Hong Kong’s Hang Seng index stood at 18,541, pointing to a slightly weaker open compared with the HSI’s close of 18,578.3.

Overnight in the U.S., an announcement from Hamas on Monday that it had accepted an Egyptian-Qatari cease-fire proposal to end the war with Israel also gave stocks a boost, with the Dow Jones Industrial Average notching a fourth consecutive winning session, up 0.46%.

The S&P 500 advanced 1.03%, while the Nasdaq Composite gained 1.19%.

— CNBC’s Brian Evans and Jesse Pound contributed to this report.

CNBC Pro: Will China’s comeback stock rally last? Wall Street weighs in and shares stock picks

China stocks have staged such a strong rally after a protracted slump for the past few years that they’re beating even the S&P 500 so far this year.

That breakout has come after a deep and lengthy decline in Chinese markets, as they lost nearly $5 trillion in three years. Investors were bearish as a result of the property debt crisis, slowing growth and other factors.

But is the bounce back sustainable? Here’s what Wall Street and other analysts say, and what to buy in the market.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: After a tough quarter for global luxury, Barclays reveals its top 3 stocks to play the sector right now

Macroeconomic uncertainties may have pushed consumers – particularly those from China – to tighten their purse strings and reduce spending on luxury goods. However, Barclays notes that several companies in the sector make good plays right now.

While Chinese consumers’ spending intentions for the ongoing quarter shows that they plan to spend more money on luxury, the investment bank’s analysts “remain cautious about the possibility of seeing improving trends.”

Still, expenditure on luxury goods is expected to 68% this year, up from 66% in 2023, they wrote, revealing the three names the like.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

‘Magnificent Seven’ fueling all the earnings growth in the S&P 500

More than three-quarters of the way through earnings season, and it is another strong showing for the “Magnificent Seven.” Of the six that have already reported, only Tesla has missed estimates.

According to earnings data provider LSEG, aggregate earnings for the Magnificent Seven are expected to soar 49% year over year. In contrast, the other 493 S&P 500 stocks are on pace to see just flat earnings growth this season, up 0.4%.

The Magnificent Seven’s strong growth has been fueled by particularly robust performance from Meta Platforms, Alphabet and Amazon over the past couple of weeks.

But no stock will have more of an effect than Nvidia, which reports results on May 22. The chipmaker’s earnings are expected to surge more than five times last year’s levels. Nvidia alone is expected to make up more than one-third of the 7% earnings growth the entire S&P 500 is now seeing this season.

— Robert Hum

Platinum may have relative value against gold, Deutsche Bank says

Some investors may have sniffed out a buy-the-dip opportunity in precious metals, according to Deutsche Bank.

Analyst Michael Hsueh said in a note to clients Monday that platinum funds have seen a recent uptick in inflows after platinum prices have drifted well below that of gold.

“Platinum is one step closer to gold compared with palladium from an investment standpoint. One piece of the argument may depend on a relative value rationale versus gold; XPTXAU reached a new record low in April,” Hsueh said.

The Abrdn Physical Platinum Shares ETF (PPLT) has seen about $34 million in flows over the past month, according to FactSet. Its price has fallen 3.9% this year, compared to a gain of 11.4% for SPDR Gold Shares (GLD).

— Jesse Pound

Don’t ignore China momentum, says Strategas

Strategas’ sentiment toward the China market has made a marked pivot from “no way” last year, to “this may be more of a strategic turn,” according to Strategas’ head of macro research and technical strategy Chris Verrone.

“Time will reveal all, but the big momentum in the China indices is not to be ignored and is spilling to the EEM which has been among the first of the bellwether global indices to break out (along with the U.K. FTSE 100),” Verrone said in a Monday note.

An upturn in China could further strengthen the bull case for industrial metals, particularly copper, Verrone added.

The benchmark Shanghai Shenzhen CSI 300 Index is up around 1.5% in May.

— Hakyung Kim