GLOBAL MARKETS DJIA 33296.96 -613.89 -1.81% Nasdaq 10957.01 -138.10 -1.24% S&P 500 3928.86 -62.11 -1.56% FTSE 100 7830.70 -20.33 -0.26% Nikkei Stock 26505.48 -285.64 -1.07% Hang Seng 21494.02 -183.98 -0.85% Kospi 2369.38 1.06 0.04% SGX Nifty* 18132.00 -90.0 -0.49% *Jan contract USD/JPY 128.42-43 -0.38% Range 128.96 128.31 EUR/USD 1.0790-93 -0.05% Range 1.0802 1.0783 CBOT Wheat March $7.424 per bushel Spot Gold $1,908.06/oz 0.2% Nymex Crude (NY) $79.24 -$0.94 US STOCKS
Stocks fell after a fresh batch of economic data offered worrying signs of how the economy is weathering the Federal Reserve's tightening campaign.
The S&P 500 was down 1.6%, with each of its 11 sectors in the red. The Dow Jones Industrial Average was down 1.8% and the Nasdaq Composite Index lost 1.2%. All three major indexes gave up gains made in early trading.
Data showed retail sales fell 1.1% in December, with higher interest rates and inflation hurting spending on vehicles, gasoline and furniture. Wholesale price inflation fell to its slowest pace since March 2021, brightening the price outlook for consumers and policy makers but casting a cloud over hopes for a "soft landing."
"This was good news for the Fed," said Sam Millette, fixed-income strategist for Commonwealth Financial Network. "The slowdown in demand and slowing producer inflation toward year-end is a positive sign that the Fed's more restrictive monetary policy is having a real impact in combating inflation."
Despite positive news on the inflation front and the likelihood of a slower pace of interest-rate increases, investors grew increasingly worried about recession risk as trading continued. It remains to be seen if the Fed's rate increases will throw the economy into a deep downturn, especially as the effects of tighter policy have yet to fully filter into the economy.
ASIAN STOCKS
Japanese stocks were lower in early trade, dragged by falls in auto shares, as weak U.S. economic data overnight raised uncertainty over earnings and the global economic outlook. Investors were focusing on Japanese government bond yields after the Bank of Japan on Wednesday kept its yield control unchanged, dashing speculation for higher rates. USD/JPY was at 128.38, down from 130.82 as of Wednesday's Tokyo stock market close. The Nikkei Stock Average was down 1.2% at 26466.98.
South Korea's benchmark Kospi edged 0.2% lower to 2363.33 in early trade as auto, financial and retail stocks retreated. Wall Street's fall overnight after weak U.S. retail sales data and growing investor worries about a possible recession were weighing on sentiment. Institutional and retail investors were net sellers. Trading remained thin ahead of the Lunar New Year holidays.
Hong Kong's benchmark Hang Seng Index was 1.0% lower at 21452.26, tracking Wall Street's losses overnight as a fresh slew of U.S. economic data offered worrying signs for the economy and a looming recession. Most stocks on the HSI were lower, with tech companies leading laggards.
Chinese shares declined amid mixed trading in Asian equities, with the release of weak U.S. economic data weighing on market sentiment. The benchmark Shanghai Composite Index slipped 0.2% to 3217.94, the Shenzhen Composite Index fell 0.3% to 2091.69 and the ChiNext Price Index was off 0.2% at 2538.50. China-U.S. relations may be in focus, following U.S. Treasury Secretary Yellen's first in-person meeting with Chinese Vice Premier Liu He in Switzerland on Wednesday. Liu's team had expressed concerns over U.S. economic, trade and technological policies toward China when he met Yellen, UOB analysts said in a note.
FOREX
JPY strengthened against G-10 and Asian currencies in the Asian morning session amid a risk-off mood, boosting the Japanese currency's safe-haven appeal. The deterioration of U.S. retail sales and industrial production data have hurt risk sentiment, Charu Chanana, market strategist at Saxo Markets, said in an email, noting the overnight tumble in U.S. stock markets. USD/JPY fell 0.4% to 128.39, AUD/JPY slipped 0.8% to 88.75 and EUR/JPY was down 0.4% at 138.54.
METALS
Gold prices were higher in early Asian trade, as investors digested a fresh batch of U.S. economic data. Prices have softened but are still holding on to the $1,900 level, said Oanda's senior market analyst Edward Moya in a note. The end of Fed tightening is approaching us, but a shallow recession might not be supportive of inflows for gold as that might lead to a stronger dollar, he said. "Gold's rally looks like it will take a break here, but it could resume if yields continue to slide." Spot gold was 0.2% higher at $1,908.06/oz.
OIL SUMMARY
Oil prices were lower in early Asian trade after posting their first loss in nine sessions overnight. The release of weak economic data in the U.S. raised demand concerns after retail sales fell more than expected in December, while total industrial production fell 0.7%, ANZ analysts said in a note. "This raised the specter of a recession, with risk appetite suffering as a consequence," they said. Front-month WTI futures fell 1.0% to $78.64/bbl; front-month Brent declined 0.9% to $84.23/bbl.
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(END) Dow Jones Newswires
01-18-23 2215ET
