World shares set for 7th straight monthly gain; dollar hovers at 3-month high

World shares were set for a seventh straight month of gains and the dollar was near a three-month high on Friday, after Amazon and Apple earnings reinforced global tech optimism and the hope that massive AI spending will ultimately bolster growth.
Asia saw Japan's Nikkei close out its best month in 35 years overnight but European stocks were a tad lower as higher euro zone services inflation numbers showed why the European Central Bank had been happy to dampen rate cut talk the previous day.
Nasdaq futures jumped 1.2 per cent and S&P 500 futures gained 0.6 per cent, though, with forecast-busting Amazon earnings lifting its shares more than 11 per cent in pre-market trading and predictions of bumper iPhone sales hoisting Apple stock up more than 2 per cent.
That offset tumbles suffered by Meta and Microsoft the previous day over worries about their surging AI spending. Six of the 'Magnificent Seven' US tech megacaps have now reported, with only Nvidia — which has just become the world's first $5 trillion company — left to come in three weeks' time.
In Asia, Japan's Nikkei had finished October with a 2 per cent jump, boosting its weekly and monthly gains to more than 6 per cent and 16.5 per cent, respectively. That was the largest monthly rise since 1990, turbocharged by hopes for aggressive fiscal stimulus under new Prime Minister Sanae Takaichi.
This week has also seen the Bank of Japan hold interest rates steady despite many economists predicting a hike.
Chinese blue chips and Hong Kong's Hang Seng both skidded roughly 1.5 per cent though after data showed China's factory activity contracted at the fastest pace in six months in October.
Investors also locked in gains after a trade truce reached by US President Donald Trump and Chinese President Xi Jinping, that will lead to reduced US tariffs on imports of Chinese goods and ensure rare-earth exports from China continue.
This week, major central bank meetings have delivered decisions that have subtly shifted expectations. The biggest surprise came from Federal Reserve Chair Jerome Powell, who pushed back against the market's sanguine view about a rate cut in December.
Both Treasuries and European government bonds were steady on Friday, but were set for weekly losses.
Two-year Treasury yields — which move inversely to prices — ticked up to 3.61 per cent, having risen 12 basis points this week already, while the 10-year yield was above 4.10 per cent again and up more than 10 bps for the week.
Germany's 10-year Bund yields, the euro area's benchmark, were broadly flat on the day at just under 2.65 per cent and set for a weekly rise of 2.5 bps.
The rise in US yields offered support to the US dollar, which was retesting this week's three-month highs at 99.58 against its major peers.
It left the euro stuck at $1.1556 despite the ECB's moderately more positive signals on Thursday. The central bank also published a survey on Friday showing euro zone firms are seeing a slight improvement in business conditions and that investment into sectors like artificial intelligence is booming.
'What the data this week suggests is that maybe we have got something fundamentally wrong about the impact of trade tariffs', Morgan Stanley's Chief Europe Economist Jens Eisenschmidt said, also highlighting the growth boost from AI. — Reuters