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(Sept 4): Asian stocks looked set to end the week lower after US stocks fell to the highest in nearly three months, with the turnover away from high-flying tech stocks gaining traction as investors questioned the sustainability of elevated valuations.
Futures in Japan, Hong Kong and Australia declined, though they posted smaller losses than the 3.5% drop in the S&P 500 Index. The Nasdaq Composite plunged 5%, its biggest drop since June, and futures fell 1%. %, indicating that the pullback could extend for a second day before the August jobs report. Treasury yields fell and the dollar rose, moving toward safe havens despite the steep decline in stocks.
Global stocks are retreating from all-time highs just as the recent sharp rally showed signs of spreading to other sectors. Investors are monitoring the progress of a vaccine for the pandemic and continued signals of support from central banks and the government to support the economy. While data on Thursday showed that jobless claims fell last week, US investors may need evidence of a fuller economic recovery after a 60% rise in the S&P 500 from its March lows.
“Given the seemingly relentless escalation of the market thanks to mega-cap tech names, it should come as no surprise that a pullback was looming as the market became increasingly widespread and overbought,” said Quincy Krosby, chief market strategist at Prudential Financial. Inc. This could be “a burning overbought market, following month-end portfolio adjustments as managers needed to catch up.”
In other places, oil was down. The Cboe volatility index, a measure of expected price swings for the S&P 500 index known as Wall Street’s “gauge of fear,” rose to its highest level since June. Bitcoin fell as much as 7.6%.
Here are some key events to come:
Friday’s U.S. jobs report is forecast to show payrolls continued to rebound in August from virus lows.
These are the main market movements:
Stocks
S&P 500 futures fell 0.6% and Nasdaq 100 contracts were down 1.1% at 7:52 am in Tokyo. The index sank 3.5% and the Nasdaq Composite lost 5% on Thursday.
Japan’s Nikkei 225 futures fell 1.9%.
Hang Seng futures fell 1.3%.
Australia’s S & P / ASX 200 Index futures fell 1.9%.
Coins
The Bloomberg Dollar Spot Index was up 0.1%.
The euro bought $ 1.1845, down 0.1%.
The yen was at 106.19 to the dollar.
The offshore yuan was trading at 6.8463 to the dollar.
Captivity
The 10-year Treasury yield fell two basis points to 0.63%.
Australia’s 10-year yield fell two basis points to 0.89%.
Raw Materials
West Texas Intermediate crude was down 0.5% to $ 41.18 a barrel.
Gold was $ 1,931.08 an ounce, little changed.
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