GLOBAL MARKETS DJIA 33826.69 129.84 0.39% Nasdaq 11787.27 -68.56 -0.58% S&P 500 4079.09 -11.32 -0.28% FTSE 100 8004.36 -8.17 -0.10% Nikkei Stock 27522.22 9.09 0.03% Hang Seng 20767.75 47.94 0.23% Kospi 2452.13 0.92 0.04% SGX Nifty* 17968.00 31 0.17% *Feb contract USD/JPY 134.31-32 +0.16% Range 134.53 134.11 EUR/USD 1.0680-83 -0.13% Range 1.0722 1.0673 CBOT Wheat March $7.654 per bushel Spot Gold $1,838.70/oz -0.2% Nymex Crude (NY) $76.35 -$2.14 U.S. STOCKS
The S&P 500 fell on Friday as investors raised bets on how much the Federal Reserve will raise interest rates in the coming months.
The broad U.S. stock index lost 11.32 points, or 0.3%, to 4,079.09, its second straight day of decline. The tech-heavy Nasdaq Composite dropped 68.56 points, or 0.6%, to 11,787.27.
The Dow Jones Industrial Average opened lower and then recovered to close higher. It added 129.84 points, or 0.4%, to 33,826.69.
The S&P 500 and Dow ended the week in the red. The Nasdaq held steady with a weekly gain of 0.6%.
“That first month was a blockbuster. Everything went up. It didn’t matter what you had,” said John Roe, head of multi-asset funds at Legal & General Investment Management. “Now it all starts again.”
Mr. Roe said investors were no longer wondering whether there will be a recession or a soft landing in which inflation slows without a severe downturn in the economy. The debate, he said, now revolves around whether there will be no “landing.” In this scenario, inflation would remain well above the Fed’s target, encouraging the central bank to push interest rates much higher.
ASIAN STOCKS
Japanese shares were lower in morning trade, dragged down by declines in electronics and technology stocks amid lingering uncertainty over tightening central bank policy and its impact on the global economy. Investors focused on yen and bond yields. USD/JPY was at 134.26, compared with 134.74 at the close of the Tokyo Stock Exchange on Friday. The Nikkei share average fell 0.3% to 27,441.68.
South Korea’s benchmark Kospi fell 0.7 percent to 2,433.46 in early trade, as battery and shipbuilding stocks retreated. Foreign and institutional investors were net sellers amid concerns about policy tightening by global central banks. Marine engine maker STX Heavy Industries fell 6.6% on reports that Hanwha Group was lowering its bid for the company after signing an MOU last week to buy a controlling stake in another engine maker. HSD Engine boat engines. Meanwhile, SCK rose 8.8% after signing a $1 billion copper sheet supply deal.
Hong Kong’s benchmark Hang Seng started the week 0.2% lower amid rising tensions between the US and China. At the Munich Security Conference over the weekend, US Secretary of State Blinken and top Chinese diplomat Wang Yi traded accusations over a downed Chinese balloon and China’s aid to Russia in the war of Ukraine Pharmaceutical and energy stocks were weighing on the market. Tech stocks fell as the Hang Seng tech index fell 0.2%. China’s benchmark lending rates were unchanged at Monday’s monthly fix, in line with market expectations.
China stocks were mixed, extending a limited pattern as the market pulled back from its upward January recovery fueled by reopening optimism. The benchmark Shanghai Composite Index gained 0.4% to 3237.58 and the Shenzhen Composite Index rose 0.1% to 2126.99. The tech-heavy ChiNext price index was the only loser, shedding 0.4% to 2439.40, as electric vehicle battery producers weighed in amid concerns about intensifying competition and price pressure this year. Analysts at GF Securities estimated that the current softness in the Chinese market could persist in the short term, given subdued technical indicators and low trading volume in recent sessions. But the market’s overall recovery trend from October lows likely remained intact and upside should emerge in the longer term, they said.
FOREX
Asian currencies were mixed with the US dollar in the morning session and could be limited during the Presidents Day holiday. Trading volumes in the foreign exchange market were expected to be light given the holiday in the United States, RBC Capital Markets said. This week’s focus is likely to be on FOMC minutes due Wednesday and BOJ governor nominee Kazuo Ueda at his parliamentary confirmation hearing on Friday, he said. USD/KRW rose 0.1% to 1,297.65, USD/SGD was little changed at 1.3371 and AUD/USD rose 0.1% to 0.6881.
The USD could continue higher this week given the recent spate of positive US economic surprises, CBA said. Ultimately, however, this superior economic performance will fade as the economy becomes more strained by rising interest rates. Accordingly, CBA expects the USD to give up its recent gains, although this is unlikely to happen this week. The US economy is not experiencing a soft or hard landing, because there is no landing in sight at all, he added. The US dollar index rose slightly in early trade in Asia to 104.06.
METALS
Gold was lower in early Asian trade, weighed down by a stronger dollar amid hawkish Fed rhetoric. Gold futures posted their third consecutive weekly loss on Friday. However, for now, it should be more limited to the downside as central banks appear poised to increase their bullion holdings, Oanda said. “Global recession risks are returning and that should lead to some safe-haven flows for gold,” he said. Spot gold was down 0.2% at $1,838.70/oz.
OIL SUMMARY
Oil prices fell in early Asian trade amid renewed fears of an economic slowdown after a round of tough inflation talks from central banks. Signs of weaker demand also weighed on sentiment in the oil market, ANZ analysts said, adding that US east coast gasoline inventories had risen to their highest level in more than d ‘a year, although imports slowed. “Oil is experiencing constant selling pressure and the real test will be whether prices can fall below $72.00 a barrel,” Oanda said. First-month WTI fell 0.3% to $76.12/bbl; First-month Brent fell 0.2% to $82.82/bbl.
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(FI) Dow Jones Newswires
02-19-23 2215 ET
