GLOBAL MARKETS DJIA 33476.46 -305.02 -0.90% Nasdaq 11004.62 -77.39 -0.70% S&P 500 3934.38 -29.13 -0.73% FTSE 100 7476.63 4.46 0.06% Nikkei Stock 27809.93 -91.08 -0.33% Hang Seng 19544.14 -356.73 -1.79% Kospi 2371.25 -17.79 -0.74% SGX Nifty* 18525.50 -65.5 -0.35% *Dec contract USD/JPY 136.85 0.21% EUR/USD 1.0516 -0.16% CBOT Wheat Dec $7.126 per bushel Spot Gold $1,793.05/oz -0.2% Nymex Crude (NY) $71.43 -$0.03 U.S. STOCKS
Stocks turned lower on Friday after producer-price data came in hotter than expected, disappointing investors who had hoped for signs of easing inflation before the Federal Reserve's meeting next week.
The S&P 500 fell 29.13 points, or 0.7%, to 3934.38 after wavering for much of the day. The Dow Jones Industrial Average was down 305.02 points, or 0.9%, to 33476.46. The technology-focused Nasdaq Composite slipped 77.39 points, or 0.7%, to 11004.62.
All three major U.S. indexes ended the week with losses, breaking a two-week winning streak. The S&P 500 retreated 3.4%.
The Fed will make its next interest-rate decision on Wednesday, and the PPI data-combined with consumer-price data Tuesday-are expected to factor heavily into the trajectory of interest rates over the coming months.
ASIAN STOCKS
Japanese stocks declined, dragged by falls in chip and other electronics stocks, as stronger-than-expected U.S. producer-price data raised concerns about the Fed interest-rate outlook. Financial stocks advanced thanks to gains in U.S. Treasury yields. Investors were focusing on U.S. consumer-price data and the Fed policy meeting later this week. The Nikkei Stock Average fell 0.5% to 27765.25.
South Korea's benchmark Kospi was down 0.4% at 2379.49 in early trade, led by losses in construction and electronics stocks. Foreign investors were net sellers amid caution ahead of the U.S. Fed's rate decision due later this week. USD/KRW was 0.5% higher at 1,308.10. Investors worry that stubbornly high U.S. inflation could force the Fed to keep lifting rates higher than expected and prompt a recession. Home builders and memory-chip makers led the retreat.
Hong Kong stocks were lower in early trade, retreating from a rally last week amid optimism over China's reopening. The benchmark Hang Seng Index shed 1.0% to 19700.77. Property companies lead losses, as the sector pulls back from its earlier sharp gains. Country Garden Services plunges 11% after its chair cut stakeholding. KGI analyst Kenny Wen reckoned that the market may sustain its post-pandemic recovery mid-term and broadly track higher over the coming months, despite potential profit-taking fluctuations.
Chinese markets were lower in early trade, dragged by the property sector and auto makers. China Vanke was down 2.3% and Poly Developments dropped 2.1%, reversing Friday's gains and following Hong Kong-listed Country Garden's loss, after its chairwoman trimmed her shareholding. The Shanghai Composite Index and Shenzhen Composite Index were each down 0.3%, while the ChiNext Price Index was 0.5% lower.
FOREX
AUD/USD can test its recent high of 0.6850 if investors interpret the FOMC to be dovish this week, said Commonwealth Bank of Australia. It noted that CBA's year-end target for the AUD/USD of 0.6200 was hit early largely due to the weaker greenback, with the USD also falling 10% against both EUR and JPY since mid-October. "The fair value of AUD/USD has increased, but AUD/USD still remains significantly undervalued," it said. "Interestingly, the increase in fair value has been narrowly based on a sharp improvement in risk appetite as proxied by a slump in the VIX." Other drivers of fair value, commodity prices and interest rate differentials, have moved against AUD/USD, it added. AUD/USD was at 0.6789 early on Monday.
METALS
Gold prices were lower in early Asian trade, as Treasury yields declined following a stronger-than-expected PPI report, Oanda said. "Gold might struggle for meaningful moves until we get the last key piece of inflation data before the Fed meets," it added. The U.S. CPI data due later in this week was expected to give more clues on whether the Federal Reserve will continue its monetary tightening moves beyond February. Spot gold was down 0.2% at $1,793.05/oz.
OIL SUMMARY
Crude oil prices were higher in early Asian trade. Despite the release of higher-than-expected U.S. PPI data, prices may continue to remain supported, in no small part due to Putin threatening to slash Russian oil production in retaliation to the G-7's proposed price caps, said SPI Asset Management, in a research report. However, several other factors could keep the price of crude from gaining too sharply, such as the prospect of slowing global economic growth, it added. The front-month contract for WTI futures rose 0.7% to $71.74/bbl, while the front-month Brent crude contract was up 0.8% at $76.71/bbl.
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(END) Dow Jones Newswires
12-11-22 2215ET
