GLOBAL MARKETS DJIA 33910.85 -391.76 -1.14% Nasdaq 11095.11 15.96 0.14% S&P 500 3990.97 -8.12 -0.20% FTSE 100 7851.03 -9.04 -0.12% Nikkei Stock 26305.46 166.78 0.64% Hang Seng 21630.17 52.53 0.24% Kospi 2362.87 -16.52 -0.69% SGX Nifty* 18108.50 32.5 0.18% *Jan contract USD/JPY 130.39-40 +1.76% Range 130.60 128.11 EUR/USD 1.0784-87 -0.03% Range 1.0802 1.0778 CBOT Wheat March $7.516 per bushel Spot Gold $1,909.99/oz 0.1% Nymex Crude (NY) $81.14 $1.28 US STOCKS
U.S. stock indexes wobbled, following sharply lower earnings from two of the biggest investment banks and Chinese data that showed a near-historic slowdown in economic growth.
The S&P 500 fell 0.2%, while the Nasdaq Composite edged up 0.1%. The Dow Jones Industrial Average pulled back 1.1%, weighed down by declines in shares of Goldman Sachs Group and property-and-casualty insurer Travelers.
U.S. stock and bond markets were closed Monday to observe Martin Luther King Jr. Day.
The S&P 500 is up more than 4% so far this year, and investors are looking for signs the rally can continue.
"I'm pretty optimistic that we can continue to climb the wall of worry because everybody was so pessimistic," said Sandy Villere, portfolio manager with Villere & Co. Villere recommended investors shift into growth stocks instead of defensive companies because he expects the Federal Reserve to stop raising interest rates soon. He's buying shares of small-cap growth companies, he said.
ASIAN STOCKS
Japanese stocks were higher in morning trade, led by gains in electronics and pharmaceutical stocks as the yen's recent strength eased. Investors were focusing on if the BOJ will make any changes to its yield-curve control. USD/JPY was at 128.49, compared with 128.65 as of Tuesday's Tokyo stock-market close. The Nikkei Stock Average was up 0.5% at 26278.03.
South Korea's benchmark Kospi was down 0.7% to 2363.29 in early trade. Financial and steel stocks were leading the index to retreat after a flat opening. Trading was thin as investors exercise caution ahead of the Bank of Japan's policy decision due later in the day.
Hong Kong's benchmark Hang Seng index opened 0.3% lower at 21514.80 in morning trade, as traders continued to digest a slew of economic data out of China on Tuesday and some losses on Wall Street overnight after diasppointing earnings. Though China reported sluggish 2022 GDP growth, some investors think the country's economy has bottomed out and will return to robust growth in 2023, in part thanks to Beijing's continued policy support. The Hang Seng Tech Index fell 0.5%.
Chinese shares were little changed, as investors continued to digest the country's latest economic data. While China's current wave of Covid-19 infections is likely to weigh on growth at the start of the year, reopening efforts mean that economic activity may return to normal in 2Q or even as early as March, Commerzbank analysts said in a note. The benchmark Shanghai Composite Index and the Shenzhen Composite Index each rose 0.1% to 3228.54 and 2097.07, respectively, while the ChiNext Price Index was flat at 2545.51.
FOREX
JPY weakened against G-10 and Asian currencies in the Asian morning session ahead of the Bank of Japan's policy meeting later in the day. "The market is on edge for significant movement," said Chris Weston, head of research at Pepperstone, in an email. USD/JPY's 1-day implied volatility is currently at 49%, which is equivalent to a 279-pip move higher or lower on the day, Weston said. Given factors such as short-JGB and long-JPY positions in the market, if the central bank leaves policy unchanged, JPY could get "smoked," he added. USD/JPY rose 0.5% to 128.84, AUD/JPY gained 0.6% to 90.04 and EUR/JPY was up 0.5% at 138.98.
METALS
Gold prices were a tad higher in early Asian trade after settling lower overnight, as investors take a breather after prices last week touched their highest levels since April. The precious metal appears to be consolidating below eight-month highs as the dollar musters up a small rebound, Oanda's senior market analyst Edward Moya said in a note. "The Fed's tightening path remains a clear driver for the precious metal but the bond market could get shaken up by the BOJ," he added. Spot gold was up 0.1% at $1,909.99/oz.
OIL SUMMARY
Oil prices were higher in early Asian trade, extending overnight gains after ending above $80.00 a barrel for the first time in more than two weeks. Sentiment was likely being helped by Chinese economic data released Tuesday, which included industrial output and GDP growth. The figures broadly beat low market expectations, and sent a clear message to traders that the country's economy has likely already passed a turning point in 4Q 2022 and will strengthen from 1Q 2023 onward, said Stephen Innes, SPI Asset Management's managing partner. "The return of China's consumption engines is enormous for the oil market outlook; while the industrial engine is revving up [and] guzzling down oil products, consumers will soon catch up at the petrol pump," he added. Front-month WTI futures rose 0.6% to $80.62/bbl; front-month Brent gained 0.4% to $86.26/bbl.
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(END) Dow Jones Newswires
01-17-23 2215ET
