GLOBAL MARKETS DJIA 34395.01 -194.76 -0.56% Nasdaq 11482.45 14.45 0.13% S&P 500 4076.57 -3.54 -0.09% FTSE 100 7558.49 -14.56 -0.19% Nikkei Stock 27682.28 -543.80 -1.93% Hang Seng 18834.55 98.11 0.52% Kospi 2454.95 -24.89 -1.00% SGX Nifty* 18923.50 -52.0 -0.27% *Dec contract USD/JPY 135.28-29 -0.04% Range 135.58 135.03 EUR/USD 1.0506-09 -0.18% Range 1.0541 1.0506 CBOT Wheat Dec $7.586 per bushel Spot Gold $1,801.42/oz -0.1% Nymex Crude (NY) $81.33 $0.78 US STOCKS
Stocks ended a choppy day with mixed results as investors weighed signs of cooling inflation against fears of how a recession could drag down corporate earnings.
The S&P 500 was off 0.1%, with financial stocks falling. Investors cited concerns that banks might set aside more funds to cover potential credit losses, a move that cuts into their profits.
The Dow Jones Industrial Average fell 0.6% while the tech-heavy Nasdaq Composite Index gained 0.1%.
Bonds continued their gains even as stocks' big rally stalled out, a sign that traders' focus was shifting to the recession that many investors have for months assumed inevitable, said Steve Wyett, chief investment strategist for BOK Financial.
"The asset classes will act differently if that's the case," Wyett said. The prospect of lower inflation and slowing Fed rate increases is clearly positive for bonds, he said. "Now equities are kind of saying, are lower rates really good news here?" he added.
ASIAN STOCKS
Japanese stocks were broadly lower, dragged by especially sharp falls in trading companies, as uncertainty continued about policy tightening by central banks and the global economic outlook. Investors were focusing on China's Covid measures. The Nikkei Stock Average declined 1.5% to 27797.24.
South Korea's benchmark Kospi fell 0.9% to 2457.47 in early trade. Tech, shipbuilding and financial stocks retreated, as investors parse latest South Korean economic data on inflation easing and exports continuing to shrink. Foreign and institutional investors were net sellers. USD/KRW was 0.3% higher at 1,303.50, regaining ground after three straight days of weakening.
Hong Kong stocks pushed higher in morning trade, extending a recent rally as investor hopes continued to rise for a postpandemic reopening in China. The benchmark Hang Seng Index edged up 0.1% to 18750.23. Central China Securities analysts said that while daily infection numbers are at record highs in China, any negative impact will likely prove temporary. The brokerage reckoned that Beijing is committed to increasingly loosening pandemic restrictions and rolling out policy measures to boost the economy. "We remain optimistic" in the market's mid-term outlook, Central China Securities said, noting downside risk is likely limited.
Chinese shares were lower, tracking broad declines in markets regionally amid growing concerns over the global economic outlook. The benchmark Shanghai Composite Index, Shenzhen Composite Index and ChiNext Price Index each edged 0.1% lower to 3161.37, 2042.16 and 2377.92, respectively. There are emerging signs that China is taking steps to exit its zero-Covid policy, CBA analyst Vivek Dhar said in a note, adding that Beijing will reportedly allow some people with low-risk Covid-19 conditions to isolate at home instead of government quarantine facilities.
FOREX
NZD/USD has broken above resistance of 0.6325 following a strong rally overnight, and was trading at 0.6372. "This has come about mostly via a weaker USD (with the US Dollar Index at a fresh low for the cycle), but the NZD has also differentiated itself against the AUD, which we believe likely reflects its large interest rate advantage," Australia and New Zealand Banking Group said. That's a pillar of support, especially given the collapse in U.S. bond yields, ANZ said. Still, there may be a correction if U.S. data tonight is strong, or if markets correct into the December Fed meeting. "Nonetheless, price action looks extremely solid, and technically, the next major target level is 0.6450 (marking both the August high and the 61.8% retracement of the whole 2022 move)," ANZ said.
METALS
Gold was slightly lower in early Asian trade, after posting the largest one-day gain in more than two years to settle above $1,800 an ounce. "Recession risk and the end of Fed rate hike cycle are both supportive for gold prices," Citi analysts said in a note, adding that China's reopening should benefit demand for metals. Citi expects gold prices to average around $1,900/oz by 4Q 2023. Spot gold was 0.1% lower at $1,801.42/oz.
OIL SUMMARY
Oil prices were lower in early Asian trade, as investors continued to mull over growing fears of a U.S. recession and more signs that China is easing its Covid-19 restrictions. "Indeed, the one glaring problem the oil market faces is the anticipated run of weaker U.S. economic data, which is the price to pay for aggressively fighting inflation," SPI Asset Management Managing Partner Stephen Innes said in a note. Investors will keep a close watch on the upcoming U.S. November nonfarm payrolls report, UOB analysts said in a note, tipping the reading to come in around 200,000. Front-month WTI and Brent futures were each 0.3% lower, at $80.94/bbl and $86.63/bbl, respectively.
TOP HEADLINES Fed's Top Banking Regulator Signals Tougher Bank-Capital Rules DOJ Watchdog Calls for Independent FTX Probe in Bankruptcy Two Fed Mandates Enter, One Mandate Leaves China Plans Covid Vaccination Drive for the Elderly in Bid to Ease Pandemic Controls Consumer Spending Jumped in October as Inflation Eased Appeals Court Halts Special-Master Review of Trump Mar-a-Lago Documents Biden Calls for South Carolina to Be First in Democratic Presidential Nomination Process EPA Proposes to Bump Share of Renewable Fuels in Gasoline Senate Votes 80-15 to Pass Measure Blocking Rail Strike Supreme Court to Decide Whether Biden Administration Can Provide Mass Student-Loan Forgiveness Disney Proposal to Restructure, on McKinsey's Advice, Triggered Uproar From Creative Executives SpaceX Gets Go-Ahead for Smaller Network of Starlink Satellites Layoffs Hit White-Collar Workers as Amazon, Walmart, Others Cut Jobs Twitter Offers Advertisers Generous Incentives, After Many Marketers Left Platform Blackstone Limits Redemptions From Real Estate Vehicle, Stock Sinks Okta Stock Surges More Than 25% as Analysts Approve of Company's Profit Heading
(END) Dow Jones Newswires
12-01-22 2215ET
