Asian shares are mixed, with Tokyo closed, as more tests for markets loom
BANGKOK– Asian shares were mixed on Monday in quiet trading ahead of major reports this week on the state of the US economy.
Hong Kong’s Hang Seng rose 0.2% to 17,120.23 and the Shanghai Composite index rose 0.1% to 2,863.23.
The markets in Tokyo and Bangkok were closed for the holidays.
In Seoul, the Kospi jumped 1.1% to 2,616.11 as shares in Samsung Electronics rose 1.1%, following advances by Big Tech companies late last week. Taiwan’s Taiex also gained 1.1%, while major computer chipmaker Taiwan Semiconductor Manufacturing Co. rose just 0.1%, while electronics maker Hon Hai Precision Electronics, also known as Foxconn, rose 4.5%.
Australia’s S&P/ASX 200 rose 0.5% to 7,815.60.
Last week started with a jolt as markets reeled from heavy selling caused by concerns over whether the U.S. economy was slowing too quickly. Japanese stocks held firm the largest percentage loss since Black Monday in 1987But things eventually calmed down after more major U.S. companies joined the group, reporting higher spring earnings than analysts had expected.
“The recent string of stronger-than-expected US economic data has helped to combat recession concerns, with interest rate expectations now suggesting the US Federal Reserve (Fed) may retain more flexibility in its easing process compared to one forced by heightened economic risks,” IG’s Yeap Jun Rong said in a commentary.
Friday is the S&P500 rose 0.5% to close at 5,344.16, after a decline of best day since 2022 and reduce the loss after the wild ride of the week to less than 0.1%.
The Dow Jones Industrial Average rose 0.1% to 39,497.54 and the Nasdaq Composite closed up 0.5% at 16,745.30.
In addition to inflation reports, we also have updates on retail sales and unemployment this week.
The most recent jobs report raised hopes for the economy after the previous week fearful investors. Households on the the bottom of the income spectrum has been struggling for some time now to keep pace with still rising prices, but economists expect the report to show a return to growth after a stagnation in retail spending in June.
The worst-case scenario would be if Tuesday and Wednesday’s inflation reports show higher-than-expected price increases at the wholesale and consumer levels, while this week’s other reports show a sharp weakening of the economy.
The AI frenzy sent a handful of Big Tech stocks into the S&P 500 to dozens of record highs this year, even as high rates weighed on other parts of the market. But the group of stocks known as the “Magnificent Seven” lost momentum last month after investors got too excited and pushed prices too high.
All Magnificent Seven companies rose on Friday except Nvidia, which fell 0.2%.
Concerns remain about the strength of the American economy. They dragged Treasury yields lower on Friday as investors sought safer places to put their money and expectations for deeper rate cuts from the Federal Reserve built. The yield on the 10-year Treasury note fell to 3.94% from 3.99% late Thursday.
“Market prices suggest that traders remain nervous about the stable assessment of policy rates, and last week’s volatility may serve as a warning that we could be just one or two bad prints away from further unrest,” Benjamin Picton, a senior market strategist at Rabobank, said in a report.
In other trading early Monday, U.S. benchmark crude gained 38 cents to $77.22 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 22 cents to $79.88 a barrel.
The US dollar rose to 147.13 Japanese yen from 146.63 yen. The euro climbed to 1.0922 dollars from 1.0919.