July 23 - A look at the day ahead in Asian markets by

Alden Bentley.

Judging by Wall Street's surge Monday, the exit of President

Joe Biden from November's election was a relief but also a wash

in that it both adds and removes dreaded uncertainty.

To the extent Biden's decision was a trading factor, we

might be seeing equal parts enthusiasm for presumptive

Democratic nominee Vice President Kamala Harris running on the

strong Biden economy, and a modified Trump trade because the

former president still leads in the polls, albeit by less than

he did than against Biden, according to politics monitoring site

PredictIt.

It's too early to have much bearing on Asia trading and

anyway anticipation of Fed easing and a deluge of U.S. company

results are more immediately salient 3-1/2 months before

Americans head to the polls.

Earnings are the focus until later in the week, especially

with mega caps Alphabet and Tesla reporting after the bell on

Tuesday. Macro wise, the first read on Q2 U.S. GDP comes

Thursday and the Personal Consumption Expenditures Price Index

on Friday, both seen as pivotal to any Fed decision. Markets see

a 25 basis point cut in September as a near certainty.

Conversely, markets seemed unprepared for China's lowering

of short- and long-term interest rates on Monday. Investors

treated it as more of a desperate act than confidence builder,

emphasizing how weak the second largest economy was.

Chinese blue chips slipped 0.9% along with the

yuan. MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS closed 0.61% lower, having shed 3% last week.

If the Nikkei 225 followed its U.S. peers down 1.16% on

Monday, led by tumbling chip-related stocks, then Nvidia's ( NVDA )

surge could shore up sentiment for Tuesday. Reuters

reported it was working on a version of its new flagship AI

chips for the China market that would comply with U.S. export

controls.

Magnificent Seven stocks that had weighed heavy last week

such as Alphabet, Meta Platforms ( META ) and Tesla

also stormed back.

Overall, U.S. earnings growth so far looks even better than

heightened expectations going into the reporting season. Based

on the 74 S&P 500 companies that had reported results as of

Friday, LSEG raised its estimate for year-over-year growth to

11.1% from 9.6% 10 days ago.

The S&P 500 ended 1.08% higher and the Nasdaq 1.58% higher,

led by tech. Energy, one of the big Trump plays, was the worst

performing sector. There was some analysis that bets could be

scaled back on victory for Republican Trump that would increase

U.S. fiscal and inflationary pressures. Markets could also think

an increased chance of a divided government under the next

administration is a good thing.

There is no clear cut election dollar play, absent a

specific call for a strong (or weak!) dollar from one of the

candidates. Still, expectations that Trump as president would

cut taxes and raise tariffs added support to the dollar index

. But that works against Japanese policy goal of

strengthening the yen and dollar/yen was slightly

lower at 157.10 in late trade.

Here are key developments that could provide more direction

to markets on Tuesday:

- Japan flash PMI (July)

- Taiwan jobless rate (June)

- S Korea PPI (June)

- Singapore CPI (June)