GLOBAL MARKETS DJIA 33826.69 129.84 0.39% Nasdaq 11787.27 -68.56 -0.58% S&P 500 4079.09 -11.32 -0.28% FTSE 100 8004.36 -8.17 -0.10% Nikkei Stock 27522.22 9.09 0.03% Hang Seng 20767.75 47.94 0.23% Kospi 2452.13 0.92 0.04% SGX Nifty* 17968.00 31 0.17% *Feb contract USD/JPY 134.31-32 +0.16% Range 134.53 134.11 EUR/USD 1.0680-83 -0.13% Range 1.0722 1.0673 CBOT Wheat March $7.654 per bushel Spot Gold $1,838.70/oz -0.2% Nymex Crude (NY) $76.35 -$2.14 U.S. STOCKS
The S&P 500 fell Friday as investors amped up bets on how far the Federal Reserve will raise interest rates in the coming months.
The broad-based U.S. stock index lost 11.32 points, or 0.3%, to 4079.09, its second down day in a row. The tech-heavy Nasdaq Composite declined 68.56 points, or 0.6%, to 11787.27.
The Dow Jones Industrial Average opened lower, then recovered to close higher. It added 129.84 points, or 0.4%, to 33826.69.
The S&P 500 and Dow ended the week in the red. The Nasdaq hung on for a weekly gain of 0.6%.
“That first month was blockbuster. Everything went up. It didn’t matter what you owned,” said John Roe, head of multiasset funds at Legal & General Investment Management. “Now it’s all kicking off again.”
Mr. Roe said investors were no longer asking whether there will be a recession or a soft landing in which inflation slows without a serious downturn in the economy. The debate, he said, now revolved around whether there will be “no landing.” In this scenario, inflation would remain far above the Fed’s target, encouraging the central bank to push interest rates much higher.
ASIAN STOCKS
Japanese stocks were lower in morning trade, dragged by falls in electronics and tech stocks amid persisting uncertainty about central banks’ policy tightening and its impact on the global economy. Investors were focusing on the yen and bond yields. USD/JPY was at 134.26, compared with 134.74 as of Friday’s Tokyo stock-market close. The Nikkei Stock Average was down 0.3% at 27441.68.
South Korea’s benchmark Kospi was down 0.7% to 2433.46 in early trade, as battery and shipbuilding stocks retreated. Foreign and institutional investors were net sellers amid concerns about policy tightening by global central banks. Ship-engine maker STX Heavy Industries was down 6.6% on reports that Hanwha Group was dropping its bid for the company after signing an MOU last week to buy controlling stake in another ship-engine maker HSD Engine. Meanwhile, SCK jumped 8.8% after signing a $1 billion copper-foil supply deal.
Hong Kong’s benchmark Hang Seng Index started the week 0.2% lower amid growing tensions between the U.S. and China. At the weekend’s Munich Security Conference, U.S. Secretary of State Blinken and top Chinese diplomat Wang Yi traded accusations over a downed Chinese balloon and China’s provision of aid to Russia in the Ukraine war. Pharmaceutical and energy stocks were weighing on the market. Tech stocks edged down as the Hang Seng Tech Index fell 0.2%. China’s benchmark lending rates were kept unchanged at the monthly fixing on Monday, in line with market expectations.
China stocks were mixed, extending a rangebound pattern as the market retreated from its soaring January rally that was driven by reopening optimism. The benchmark Shanghai Composite Index gained 0.4% to 3237.58 and the Shenzhen Composite Index edged up 0.1% to 2126.99. The tech-heavy ChiNext Price Index was the only loser, shedding 0.4% to 2439.40, as EV battery producers weighed amid worries over intensifying competition and pricing pressure this year. GF Securities analysts reckoned the Chinese market’s current softness may persist in the near term, given muted technical indicators and low trading volume in recent sessions. But the overall recovery trend from the market’s October lows likely remained intact and upside should emerge in the longer run, they said.
FOREX
Asian currencies were mixed against the U.S. dollar in the morning session and could be range-bound amid the Presidents Day holiday. Trading volumes in the foreign-exchange market were expected to be light given the U.S. holiday, RBC Capital Markets said. Focus for this week was likely to be on the FOMC minutes due out on Wednesday and BOJ Governor-nominee Kazuo Ueda at his parliamentary confirmation hearing on Friday, it said. USD/KRW edged 0.1% higher to 1,297.65, USD/SGD was little changed at 1.3371 and AUD/USD was up 0.1% at 0.6881.
USD could track higher this week given the recent bout of positive U.S. economic surprises, said CBA. However, eventually, that economic outperformance will fade as the economy shows more strain from interest-rate rises. Consequently, CBA expects USD to give up its recent gains, though that was unlikely to happen this week. The U.S. economy isn’t undergoing a soft or a hard landing, because there is no landing that can be seen at all, it added. The U.S. dollar index was up slightly in early trading in Asia at 104.06.
METALS
Gold was lower in early Asian trade, weighed by a stronger dollar amid a hawkish Fed rhetoric. Gold futures posted the third weekly loss in a row on Friday. However, further downside should be limited for now as central banks appear poised to increase their bullion holdings, Oanda said. “Global recession risks are returning and that should lead to some safe-haven flows for gold,” it said. Spot gold was 0.2% lower at $1,838.70/oz.
OIL SUMMARY
Oil prices fell in early Asian trade amid renewed fears about an economic slowdown after a round of tough talk on inflation from central bankers. Signs of weaker demand was also weighing on sentiment in the oil market, ANZ analysts said, adding that U.S. east coast gasoline inventories had risen to their highest level in more than a year, even as imports slowed. “Oil is seeing steady selling pressure and the true test will be if prices can break below the $72.00 a barrel level,” Oanda said. Front-month WTI fell 0.3% to $76.12/bbl; front-month Brent slipped 0.2% to $82.82/bbl.
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(END) Dow Jones Newswires
02-19-23 2215ET
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