Asian stocks slipped Thursday after sobriety set in on Wall Street, and minutes from the US Federal Reserve posed economic challenges amid the coronavirus pandemic.
Japanese benchmark Nikkei 225 NIK,
fell 1% in early trade, and the Kospi of South Korea 180721,
ploft 3.1%. Hang Seng HSI from Hong Kong,
lost 1.9%, while the Shanghai Composite SHCOMP,
fell 1%. S & P / ASX 200 XJO from Australia,
fell 0.9%, while benchmark indices in Taiwan Y9999,
and Singapore STI,
slow down. Markets in Indonesia and Malaysia were closed for holidays.
“The last Fed minutes had been one to provide a reality check for markets, although with the increased prices, it would probably also have been an excuse to take some profit off the table,” said Jingyi Pan, a market strategist with IG.
“Most notably, Fed minutes of the FOMC meeting in July had officials’ perceptions of the pandemic weighing heavily on the economy and risks to the medium-term outlook,” she said.
The central bank has been one of the main pillars striking the market, after lowering short-term interest rates to its record low and essentially promising to buy as many bonds as it takes to keep markets smooth.
The minutes of the Fed’s last policy meeting, released last Wednesday, showed that policymakers are finding it difficult to predict the path of the economy, which will strongly depend on what happens to the virus.
“In no uncertain terms, the FOMC minutes deflated the Federal Reserve’s balloon markets when the September minutes were discouraged. So without the floating markets of the Fed hot air balloon today, supplies are temporarily underdeveloped for gravity, ‘said Stephen Innes, chief global strategist at AxiCorp.
The S&P 500 SPX,
fell 0.4% to 3,374.85, a day after the last of its losses, caused by the pandemic, and the February 19 peak overcame. The Dow Jones Industrial Average DJIA,
also posted an earlier gain, dropping 0.3% to 27,692.88. The Nasdaq Composite COMP,
dropped 0.6% to 11,146.46.
The Asian region relies heavily on a healthy US economy to sustain its growth. Export-dependent Japan has slumped in recession, slumped by delays in the US, as well as China, with production halted, tourism reduced and consumption shrunk. Analysts say a recovery is likely to occur for the world’s third largest economy, but also acknowledge great uncertainty, without a vaccine for COVID-19.
Investors still seem to believe that the US Congress and the White House will reach a deal to provide more help to the economy after federal unemployment benefits and other incentives expired.
Investors around the world are also awaiting developments over the growing tensions between the United States and China. The world’s largest economies have long had trade problems, and President Donald Trump has recently focused on Chinese tech companies. Also hanging over the market is the upcoming US election, with the major changes in policy it could create.
Seasonal reporting for major U.S. companies has almost picked up, with companies in the S&P 500 on track to report a sharp decline in their spring earnings, but not as bad as Wall Street expected.
In the latest praise for Big Tech, Apple’s AAPL,
total market value short short $ 2 trillion, the first time a US company has crossed that threshold. Technology companies, including video game maker Nintendo Co. of Japan, are thriving as the pandemic accelerates work-from-home and other tech-friendly trends.
Benchmark US raw CLU20,
lost 40 cents to $ 42.53 a barrel in electronic trading on the New York Mercantile Exchange. It rose 4 cents to $ 42.93 a barrel on Wednesday. Brent raw BRNV20,
, the international standard, fell 35 cents to $ 45.02 per barrel.
The US dollar USDJPY,
fell Wednesday to 106.06 Japanese yen from 106.13 yen.
.
