Bloomberg — Asian stocks fell on Thursday as investor concerns about the spread of Covid-19 from China sent US stocks lower for the second day in a row.
Australian and Japanese stocks fell about 1% and benchmark contracts in Singapore and Taiwan fell. The S&P 500 fell 1.2% in light trade, to its lowest level in more than a month.
10-year Australian and New Zealand government bond yields rose. The 10-year Treasury yield and the US dollar were flat after rising on Wednesday.
Risk appetite waned after news broke that the United States would require air travelers from China presents a negative Covid-19 test result before entering the country. In Italy, health authorities have said they will test passengers from China and nearly half of the passengers on two Chinese flights to Milan have the virus.
The prospect of a new pandemic disrupting fragile supply chains as central banks struggle to rein in inflation dampened sentiment in the final week of 2022 trading after a rough year for financial markets. Global stocks lost a fifth of their value, the largest annual drop since 2008, and the global bond index fell 16%. The dollar rose 7% and the yield on 10-year US bonds jumped above 3.80% from 1.5% at the end of 2021.
Hong Kong has removed restrictions on gatherings and testing for travelers in a further relaxation of recent key Covid rules, providing a boost to the global economy but raising fears it will amplify inflationary pressures and prompt US policymakers to take action. The United States to maintain strict cash adjustments.
Reopening China “complicates the Fed’s work in terms of adjusting oil prices, easing global inflation and aggregate demand.. “This will be one of the most important things to watch in the first half,” Samir Samana, chief global markets strategist at Wells Fargo Investment Institute, said on Bloomberg TV.
Data released on Wednesday showed that the Federal Reserve’s aggressive tightening policy has weighed on the housing market. Pending home sales in the United States fell for the sixth consecutive month in November, to the second lowest level ever recorded. Borrowing costs have doubled since the beginning of the year and home sales have been declining for months.
Elsewhere, oil fell amid tight liquidity as investors weighed the consequences of Russia’s export ban on buyers sticking to price caps.
“We expect the economy to slow significantly or enter a recession sometime in 2023,” writes Nancy Tengler, CEO and Chief Investment Officer at Laffer Tengler Investments.
A sharp recession would be bearish for stocks, but given the resilience of the US economy And the labor market narrows, we expect a slowdown or a shallow and short recession. This could allow stocks to recover in the second half of 2023.”
Some of the major movements of the markets:
procedures
S&P 500 futures were little changed at 9:30 a.m. Tokyo time. The S&P 500 fell 1.2%.
Nasdaq 100 futures rose 0.1%. The Nasdaq 100 index fell 1.3 percent.
Hang Seng Index futures fell 1.9%.
Japan’s Topix fell 1.4%.
Australia’s S&P/ASX 200 fell 1.1%.
Euro Stoxx 50 futures fell 0.3%.
Currency exchange rate
The Bloomberg Spot Dollar Index fell 0.1%.
The euro rose 0.1 percent to settle at $1.0625.
The Japanese yen advanced 0.3% and settled at 134.10 per dollar
The yuan did not record major changes and settled at 6.9918 per dollar.
Digital currencies
Bitcoin rose 0.2% to settle at $16,547.15.
Ether rose 0.2 percent to settle at $1,189.09.
bonds
The yield on the 10-year Treasury fell 2 basis points, to 3.86%.
The yield on 10-year Japanese bonds was little changed, at 0.46%.
The yield on the Australian 10-year note rose four basis points, to 4.07%.
raw materials
West Texas Intermediate crude fell 0.6% to $78.45 a barrel.
The price of spot gold has not changed
This article was produced with the help of Bloomberg Automation.
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