GLOBAL MARKETS DJIA 34429.88 34.87 0.10% Nasdaq 11461.50 -20.95 -0.18% S&P 500 4071.70 -4.87 -0.12% FTSE 100 7556.23 -2.26 -0.03% Nikkei Stock 27821.63 43.73 0.16% Hang Seng 19311.83 636.48 3.41% Kospi 2432.24 -2.09 -0.09% SGX Nifty* 18868.00 43.5 0.23% *Dec contract USD/JPY 134.38-39 +0.06% Range 134.76 134.14 EUR/USD 1.0566-69 +0.24% Range 1.0576 1.0527 CBOT Wheat Dec $7.372 per bushel Spot Gold $1799.78/oz 0.1% Nymex Crude (NY) $80.13 -$1.09 US STOCKS
U.S. stocks wobbled around the flatline, retracing early losses after a stronger-than-expected jobs report cast doubt on how quickly the Federal Reserve will be able to slow down its pace of interest-rate increases.
The S&P 500 slipped 0.1%, while the Dow Jones Industrial Average rose 0.1% and the Nasdaq Composite dropped 0.2%
Stocks had received a boost during the week from Fed Chairman Jerome Powell, who said in a speech Wednesday that the central bank is on track to lower the pace of interest-rate increases starting in December.
Friday's employment data, which showed the U.S. economy added more jobs in November than economists anticipated, brought the rally to a halt.
"The adverse reaction to the nonfarm payroll numbers sits in that counterintuitive world of good news is bad news as it pertains to what the Fed might have to do," said Art Hogan, chief market strategist at B Riley Wealth Management. "To me, that's always a mistake and likely will alleviate next week."
ASIAN STOCKS
Japanese stocks were lower, dragged by electronics, auto and financial stocks amid uncertainty over the pace of the U.S. Fed's tightening and the oil-price outlook. Crude-oil prices are being closely watched as wealthy nations impose a price cap on Moscow's petroleum exports. The Nikkei Stock Average was down 0.1% at 27752.05.
South Korea's benchmark Kospi edged 0.2% lower to 2429.57 in early trade. Batteries and chemical shares retreated after the stronger-than-expected U.S. jobs report fueled revived investor worries over the Fed's pace of interest-rate increases. But cosmetics and travel stocks were higher on hopes for China's easing of Covid-19 restrictions. Retail and institutional investors were net buyers, while foreigners are net sellers.
Hong Kong's Hang Seng Index rose 2.1% to 19068.59 in early trade, boosted by Chinese tech and property shares. The rally came as Chinese local authorities lifted some pandemic-related restrictions. Longfor Group increased 5.6% and Country Garden Holdings was up 6.0%, following news that China's top four state-owned lenders have been ordered to issue offshore loans to help developers repay overseas debt.
Shares in China were higher in early trade, as more cities across the country eased Covid policies over the weekend. "Although there have been several local changes to Covid policies, China has yet to shift away from the zero-Covid policy officially," SPI Asset Management managing partner Stephen Innes said in a note. Travel and consumer stocks were leading gains. The Shanghai Composite Index rose 0.5% to 3181.92, the Shenzhen Composite Index increased 0.6% and the ChiNext Price Index was 0.3% higher.
FOREX
NZD/USD fell back below 0.64 early on Monday, having hit levels not seen since August at the end of last week. Australia and New Zealand Banking Group has one eye on next week's FOMC meeting, noting the Fed may lift its terminal rate projection above 5% even if it opts for a smaller 50bp rise in the Fed Funds Rate. "If that occurs, the question we're pondering is: how will the USD fare?" said ANZ in a note. "We may be shaping up for an epic battle between the 'recessionists' and the 'rate-watchers', all of which portends USD volatility." ANZ believes the NZD/USD's fair value at 0.65, with the next major technical target being 0.6450, representing the August high. NZD/USD was recently at 0.6373.
METALS
Gold edged higher in early Asian trade, reversing a previous pullback after a "shockingly hot" nonfarm payroll report, said Oanda senior market analyst Edward Moya in a note. The unexpectedly strong jobs report spurred the U.S. dollar to rise, and traders began to raise expectations of future hikes from the U.S. Federal Reserve, he said. The pullback in gold prices was unwarranted, as inflation is steadily declining, which should mean the U.S. Federal Reserve will slow the pace of its rate hikes, he said. Spot gold was up 0.1% at $1799.78/oz.
OIL SUMMARY
Crude oil rose after China indicated it will ease Covid restrictions in various cities, including Shanghai and Hangzhou. However, traders could remain on edge after the European Union and Group of Seven nations imposed a price cap of $60/bbl on Russian oil, which is set to take effect this week, ANZ said. European sanctions on Russian oil also kick in this week, while OPEC+ has made the decision to keep its output steady, which raises uncertainty on oil supply and demand in coming months, ANZ added. The front-month contract for WTI futures was up 2.2% at $81.77/bbl, while front-month Brent futures rose 2.3% to $87.55/bbl.
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(END) Dow Jones Newswires
12-04-22 2215ET
