Asian stocks mixed after Wall Street extends losses as technology and energy stocks fall
HONG KONG — Asian markets were mixed on Thursday following a global sell-off a day earlier, as Wall Street fell in technology, energy and other sectors.
Japan’s benchmark Nikkei 225 fell 0.9% to 36,700.19 in morning trading.
Data released on Thursday showed that wage growth in Japan remains strong. Average cash earnings rose 3.6% year-on-year in July, beating market expectations. Real earnings unexpectedly rose 0.4% in July, raising the prospect of another rate hike.
The US dollar traded at 143.81 Japanese yen, boosted by the robust data.
“If global markets remain in risk-off mode — especially with commodities like oil tumbling — the Fed could be pressured to pull the trigger on a larger 50 basis point cut. This would be driven by diminishing inflation risks, which could send USD/JPY further south,” Stephen Innes of SPI Asset Management said in a commentary.
In South Korea, the Kospi fell less than 0.1% to 2,579.93 as the country’s economy shrank 0.2% in the second quarter, in line with estimates.
Hong Kong’s Hang Seng index fell 0.4% to 17,379.83 and the Shanghai Composite index rose 0.1% to 2,785.38.
Australia’s S&P/ASX 200 rose 0.1% to 7,957.40.
US futures fell as oil prices rose.
On Wednesday is the S&P500 fell 0.2% to 5,520.07. The Nasdaq Composite lost 0.3% to 17,084.30. However, the Dow Jones Industrial Average managed to gain 0.1% to close at 40,974.97.
The market’s latest pullback came after a government report showed vacancies In the US, the number of job openings unexpectedly fell in July, a sign that employment could cool in the coming months.
The Labor Department reported that there were 7.7 million unfilled job openings in July, down from 7.9 million in June and the lowest level since January 2021. Job openings have been falling steadily this year, from nearly 8.8 million in January. But the report was mixed overall, with hiring up last month.
Several other reports this week will provide a clearer picture of the economy from the Fed and Wall Street.
The Institute for Supply Management will release its August service sector index on Thursday. The service sector is the largest segment of the U.S. economy.
The U.S. is set to release its monthly jobs report for August on Friday. Economists polled by FactSet expect the report to show the U.S. added 160,000 jobs, up from 114,000 in July, and that the unemployment rate fell slightly to 4.2% from 4.3%. The strength or weakness of the report is likely to influence the Fed’s plans for how it cuts its benchmark interest rate.
Traders are predicting that the Fed will cut its benchmark interest rate by 1% by the end of 2024. Such a move would require the Fed to cut rates by more than the traditional quarter percentage point at one of its meetings in the coming months.
In the bond market, the yield on the 10-year Treasury note fell to 3.76% from 3.83% Tuesday night. That’s down from 4.70% in late April, a significant move for the bond market. The yield on the 2-year Treasury note, which is more in line with potential Fed action, fell to 3.76% from 3.87%.
The 10-year Treasury and 2-year Treasury are at their lowest inversion levels in more than two years. An inversion occurs when the shorter maturity is higher than the longer maturity. Historically, this signals a recession, although the current inversion has been in place for more than two years amid a growing economy.
In energy trading, U.S. benchmark crude rose 14 cents to $69.34 a barrel. Brent crude, the international standard, rose 12 cents to $72.82 a barrel.
In currency trading, the euro cost $1.1077, down from $1.1082.