Shares fell in Asia on Tuesday due to skepticism about the recent upward momentum in world markets due to rising confirmed cases of coronavirus and straining strains between the United States and China.
The White House decision to reject almost all Chinese maritime claims in the South China Sea increased investor concern. The world’s two largest economies have been fighting for everything from the pandemic to human rights.
Nikkei 225 NIK from Japan,
fell 0.8% while the Hong Kong Hang Seng HSI Index,
decreased 1.7% as reports of locally transmitted coronavirus cases prompted authorities to take precautions against the pandemic. The SHCOMP composed of Shanghai,
decreased 0.9% and the smallest-cap Shenzhen Composite 399106,
fell 1.1%. Kospi 180721 from South Korea,
down 0.5% and benchmarks in Taiwan Y9999,
Singapore ITS,
and Indonesia JAKIDX,
it fell. S & P / ASX 200 XJO from Australia,
withdrawn 0.4%.
An indicator of how serious the regional damage could be came from the anticipated estimate of Singapore’s gross domestic product, or GDP, for the second quarter. It showed an annual contraction of 12.6%, confirming Singapore’s worst recession.
“It is also the weakest result among our estimates for most Asian economies,” said Prakash Sakpal, economist at ING, noting that the number was appalling, despite the fact that “Singapore was not affected as much by the pandemic of COVID-19 like some of its Asian neighbors. ”
Wall Street is receiving a painful reminder of the threat the pandemic poses to the economy, as the reopening brings new spikes in coronavirus cases.
The S&P 500 fell 0.9%, and all losses accumulated in the last hour of trading after California said it will extend closings of bars and restaurants across the state, among other restrictions. It is one of many states in the western and southern United States where coronavirus counts are accelerating and threatening the budding recovery that has just begun for the economy.
California’s announcement, accounting for nearly 15% of the country’s economy, combined with the White House escalating its tensions with China to topple the market from its previous 1.6% gain.
Technology stocks were the most affected, highlighted by Microsoft’s MSFT,
go from an early profit of 1% to a loss of 3.1%. It’s a big step back for the tech-oriented giants, who have been crossing higher through the gambling pandemic who can continue to grow almost regardless of the economy.
“There is a growing feeling that the recovery from the virus-related shutdown will be longer, more uneven than perhaps the market was looking for,” said Willie Delwiche, investment strategist at Baird. “And on top of that, there are a number of tech companies that have built up tremendously in the past few weeks, so there is also a bit of a shakeup.”
The technology losses helped drag the Nasdaq Composite COMP,
2.1% less than 10,390.84. The Dow Jones Industrial Average DJIA,
squealed a gain of less than 0.1%, at 26,085.80. It had previously gone up 563 points. The S&P 500 SPX,
It fell 29.82 points to 3,155.22.
In a sign, investors are lowering their expectations for the economy, Treasury yields fell and smaller stocks fared worse than their larger rivals. The Russell 2000 Small Cap Index lost 1.3%.
Volatility hit the markets just as Corporate America tells Wall Street how dire the pandemic was in its bottom line.
Several of the country’s largest banks are slated to report their results on Tuesday, including JPMorgan Chase JPM,
And expectations are almost universally dire across the S&P 500.
Analysts say the largest US companies likely saw their earnings per share drop nearly 45% between April and June, compared to the previous year’s levels. That would be the biggest drop from the depths of the Great Recession in 2008, according to FactSet.
Investors expect banks, which traditionally start each earnings season every three months, to say that they have had to set aside billions of dollars to cover loans that could go wrong due to the recession caused by the pandemic, for example.
For energy stocks, whose earnings reports start later in July, Wall Street expects earnings to have disappeared entirely. Exxon Mobil is expected to report its second consecutive losing quarter.
The hope is that the economy and declines in corporate profits bottomed out in the spring and will continue to improve. The labor market, retail sales and other measures of the economy have already begun to show a fledgling improvement.
If governments continue to bring restrictions to stem the resurgence of the outbreak, it could stifle fragile economic improvements just as they are put in place.
“Most important is the COVID-19 data,” said Darrell Cronk, chief investment officer at Wells Fargo Wealth and Investment Management. “That will affect whether we have to slow down or stop economic activity in the second half of the year.”
American crude oil benchmark CLQ20,
it lost 93 cents at $ 39.17 a barrel. It fell 1.1% to $ 40.10 a barrel on Monday. Brent crude BRNU20,
, the international standard, fell 83 cents to $ 41.89 per barrel.
The US dollar USDJPY,
It fell to 107.19 Japanese yen from 107.27 yen on Monday.
.
