(Bloomberg) — Asian equities faced early declines following a slump in US stocks after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer. (Bloomberg) — Asian equities faced early declines following a slump in US stocks after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer. Australian shares and contracts for Japanese benchmarks fell, while those for Hong Kong edged higher.
The S&P 500 ended Wednesday 0. 8% lower, extending a run of daily declines that began on the last trading day of 2023. US tech was among the hardest hit corners of the market.
The Nasdaq 100 fell 1. 1%, a fourth daily drop, and the longest losing streak in two months. Alphabet Inc.
was the sole company within the so-called Magnificent Seven to avoid a loss, in a sign of waning investor appetite for tech stocks that led the rally last year. The weakness in equities was spurred along by Fed minutes from its December meeting that suggested rates could remain at restrictive levels “for some time,” while noting rate cuts could emerge before the year is out. Swaps traders have been reining in their bets on rate cuts after factoring in a full quarter point cut to the benchmark rate by the March meeting.
“Overall, it was a hawkish update from the Fed,” according to Ian Lyngen at BMO Capital Markets, though “the tone has apparently fallen on indifferent ears. ” In contrast to equities, government bonds stemmed declines from one of the worst opening days to a year on record. The 10-year Treasury yield inched one basis point lower to 3.
9% as the Fed minutes showed the possibility of slowing the pace of quantitative tightening. Australian and New Zealand yields were little changed early Thursday. US manufacturing data on Wednesday showed activity remained in contraction.
Separate figures showed the number of job openings fell slightly in November from the prior month’s revised number in a sign of labor market softening. “Overall, the labor market remains strong, but demand is cooling, coming into better balance with supply,” Rubeela Farooqi, chief US economist at High Frequency Economics wrote. “These data will be welcome news for policymakers and support the Fed’s view that the next move in rates will be lower, likely in Q2.
” Elsewhere, a gauge measuring dollar strength advanced for a fourth straight session Wednesday, its best run since November. The yen was steady at around 143 per dollar after weakening almost 1% against the greenback. In Asia, investors will be parsing China’s December Caixin services PMI for signs of resilience in the world’s second largest economy.
PMI data from S&P Global for Singapore and Hong Kong are also due, as is Jibun Bank manufacturing PMI data for Japan. Geopolitics remained in focus. Iran said attacks that killed almost 100 people in the country were carried out to punish its stance against Israel, intensifying tensions in the region.
The tensions weighed on crude prices, which were also depressed by supply disruptions in Libya and a statement from OPEC pledging to stabilize prices. West Texas Intermediate and Brent prices rose 3. 30% Wednesday.
Elsewhere, a slump in Bitcoin saw the cryptocurrency erase almost all gains it had made so far this year. Comprehensive cross-platform coverage of the U. S.
market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Tim Stenovec. Source: Bloomberg China Caixin services PMI, Thursday Eurozone S&P Global Eurozone Services PMI, Thursday US initial jobless claims, ADP employment, Thursday Eurozone CPI, PPI, Friday US nonfarm payrolls/unemployment, factory orders, ISM services index, Friday Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Friday Some of the main moves in markets: Stocks S&P 500 futures were little changed as of 8:12 a. m.
Tokyo time Nasdaq 100 futures were little changed Nikkei 225 futures fell 0. 6% Hang Seng futures rose 0. 4% Australia’s S&P/ASX 200 fell 0.
3% Currencies The Bloomberg Dollar Spot Index rose 0. 2% The euro was little changed at $1. 0925 The Japanese yen rose 0.
2% to 143. 05 per dollar The offshore yuan was little changed at 7. 1630 per dollar Cryptocurrencies Bitcoin fell 0.
6% to $42,688. 44 Ether fell 1. 2% to $2,201.
35 Bonds Australia’s 10-year yield declined two basis points to 4. 02% Commodities West Texas Intermediate crude rose 0. 4% to $73.
02 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation. More stories like this are available on bloomberg. com ©2024 Bloomberg L.
P. .
From: bloombergquint
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