Asian stocks were mixed on Wednesday as traders weighed the impact of high inflation on the economic recovery and looked to earnings reports. An indicator of the dollar marked lower.
Japan stocks posted modest losses, while South Korea fared better amid a strong employment report. S&P 500 and Nasdaq 100 futures fell as investors wait to see if the corporate earnings outlook will boost sentiment. Apple Inc. slipped into a likely cut in iPhone 13 production targets for 2021 due to chip shortages, putting the spotlight on pandemic-related supply chain issues.
The 10-year US Treasury yield remained below 1.60%. Markets are bracing for a US CPI report expected to show high inflation. An oil rally stopped, but crude remained around $ 80 a barrel amid a global energy crisis. Chinese thermal coal futures hit another record high.
Traders continue to monitor China Evergrande Group’s debt problems. Standard Chartered Plc CEO Bill Winters said Beijing will not allow the turmoil surrounding the property developer to escalate into a systemic crisis. But there is little clarity about what officials might do next. In Hong Kong, trade was canceled due to a storm.
The next wave of corporate earnings releases will provide a window on whether companies expect price pressures to reduce profit margins. A backdrop of slowing economic growth and rising costs, just as key central banks prepare to cut stimulus, is making investors nervous.
“Some of these issues such as inflation, the 10 years, the Covid variant, the future of corporate taxes, of course they will weigh on the market, but I still think that we are in an economic recovery”, Sylvia Jablonski. The chief investment officer and co-founder of Defiance ETF said on Bloomberg Television.
Federal Reserve Bank of Atlanta president Raphael Bostic said the rise in inflation is lasting longer than expected, so it is inappropriate to refer to a rise as transitory. Vice President Richard Clarida noted that the conditions required to begin reducing the Fed’s bond purchase program “have almost been met.”
The International Monetary Fund has warned of the risk of sudden and steep declines in global equity prices and home values as global central banks withdraw support they provided during the pandemic.
Meanwhile, China’s exports in yuan terms grew at a faster rate in September than the previous month, according to Bloomberg calculations, despite a national energy crisis that forced companies to cut production.
In cryptocurrencies, Bitcoin slowed its recent rally and traded around $ 56,300.
Here are some events to watch this week:
- Minutes of the US FOMC and CPI Wednesday
- China PPI, Thursday CPI
- Initial US Unemployment Claims, PPI Thursday
- S&P 500 futures were down 0.1% as of 1:05 pm in Tokyo. The S&P 500 fell 0.2%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 0.4%
- Japan’s Topix Index lost 0.3%
- Australia’s S & P / ASX 200 Index was little changed
- South Korea’s Kospi Index added 1%
- China’s Shanghai Composite Index fell 0.4%
- Euro Stoxx 50 futures rose 0.1%
- The Japanese yen was at 113.46 per dollar.
- The offshore yuan was trading at 6.4480 to the dollar.
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro is trading at $ 1.1552.
- The 10-year Treasury yield was 1.58%.
- The yield on Australia’s 10-year bonds fell about four basis points to 1.69%.
- West Texas Intermediate crude was at $ 80.42 a barrel, down 0.3%.
- Gold was at $ 1,762.09 an ounce, up 0.1%.
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