ADVFN News | US futures are rising cautiously after Wall Street’s worst day in more than 2 years
Welcome to your five-minute morning read on how markets are reacting around the world this morning.
ASIA: Asian shares fell sharply on Wednesday after Wall Street indexes fell after the U.S. consumer price index report for August came in above expectations.
The Japanese Nikkei fell 2.7% to 27,818.62 points. The Japanese yen traded at 143.75 to the dollar after hovering around its lowest levels since September 1998. Basic machinery orders in Japan jumped 5.3% in July from the previous month, beating expectations for a 0.8% decline. , compared to 0.9% in June. Compared to July 2021, core orders rose more than 12%, beating the 6.6% growth forecast by economists.
The Hang Seng index in Hong Kong fell 2.44% to 18,856.00 points, while the Hang Seng Tech index fell 3%. Power tool maker Techtronic Industries fell more than 10% and e-commerce giant JD.com fell more than 4%. Bilibili fell by more than 6%, while Baidu fell by close to 5%. Alibaba also fell more than 4%.
In Australia, the S&P/ASX 200 fell 2.58% to 6,828.60, its worst decline in nearly three months. Mining giant Rio Tinto has announced a $3 billion Cordillera Ocidental iron ore project in the Pilbara region. Rio Tinto has confirmed that it continues to work closely with Baowu on low-carbon steel research, exploring new methods to reduce carbon emissions and improve environmental performance across the steel value chain. Rio Tinto shares fell 1.9 percent. Among other miners, Fortescue fell 2.1% and BHP closed up 1.9%. Oil producers Santos and Woodside Energy closed up 1.5% and 2.9%, respectively.
Kospi in South Korea fell 1.34% to 2411.42 points. The South Korean won breached the 1,390 to the dollar mark and last traded at 1,391.98 to the dollar, around its weakest level since March 2009.
The Shanghai Composite in mainland China fell by 0.80% to 3,237.54 points, and the Shenzhen Component by 1.25% to 11,774.78 points. Tensions between the US and China also weighed on sentiment. Chinese leader Xi Jinping and Russian President Vladimir Putin are due to meet later in the week, strengthening ties between the countries as the West moves forward with sanctions against Moscow over its invasion of Ukraine. Meanwhile, the US is considering new sanctions against Beijing aimed at deterring aggression against Taiwan, a self-governing island democracy that China claims as its territory.
The MSCI index for Asia and the Pacific excluding Japan fell 2.28%.
EUROPE: Most European markets continued to fall on Wednesday as investors continued to react to the latest US inflation data.
The pan-European Stoxx 600 was down 0.2% late in the morning, with food and drinks stocks leading losses, while retail stocks rose after a rise in profit at Spanish clothing group Inditex.
Spain’s IBEX 35 rose 0.55%.
Italy’s FTSE MIB rose by 0.67%, but Germany’s DAX 30 fell by 0.41%, France’s CAC 40 by 0.16%.
In London, the FTSE 100 fell 0.84%. Among LSE-listed miners, Anglo American fell 1.3%, Antogasta fell 1.5%, while giants BHP and Rio Tinto lost 1% and 0.6% respectively. The oil company British Petroleum advanced 0.4%.
Inflation in the UK eased in August due to falling fuel prices, although food prices continue to rise as the country’s cost of living crisis persists. The consumer price index rose 9.9% year-on-year, slightly below the consensus economists’ forecast of 10.2%, and also fell from 10.1% in July. An unexpected slowdown in UK inflation is supporting the British currency. The pound sterling rose 0.6% against the US dollar to around $1.5556.
NOW: Stock index futures rose on Wednesday morning after warmer-than-expected inflation sent the major indexes plummeting to their worst day since June 2020 and dampened investor expectations of less dovishness from the Federal Reserve.
August’s consumer price index report showed inflation rose 0.1 percent month-on-month and 8.3 percent year-on-year, instead of 8.1 percent. Core CPI, which excludes variable food and energy costs, rose 0.6% from July and 6.3% from August 2021. Markets had expected lower readings due to falling gas prices, which fell 10.6% in compared to the previous month. The warmer-than-expected reading led investors to interpret the Federal Reserve as likely to raise interest rates more than expected to fight inflation, and also fueled fears that the Federal Reserve could hike beyond the 75 basis points that markets are pricing in. The market expected that at least inflation had stabilized.
During regular trading on Tuesday, the Dow fell 1,276.37 points, or 3.94%, to 31,104.97 points, while the S&P 500 fell 4.32% to 3,932.69 points. The Nasdaq Composite fell 5.16% to 11,633.57 points. All the major indexes ended their four-day streak of highest values.
President Joe Biden, asked during a press conference Tuesday if he was concerned about the inflation data, replied: “No, I’m not, because we’re talking about a tenth of 1 percent.” “The stock market doesn’t necessarily reflect the state of the economy, as you well know,” Biden said. “And the economy remains strong. Unemployment is low. Jobs are on the rise. Manufacturing activity is good… I think we’ll be fine.”
US Treasury yields continued to rise in the early hours of Wednesday morning. The policy-sensitive yield on the Fed’s 2-year Treasury note rose 1 basis point higher to 3.805%, its highest level since November 2007. The yield on the 10-year Treasury note rose slightly more than a basis point, trading at 3.439%. The yield on the 30-year note also rose by just over half a basis point, to 3.517%.
A reading of the producer price index is expected at 9:30 a.m. Wednesday and could offer more clues about the inflation situation ahead of the Fed meeting next week. Weekly US crude oil inventories will be released at 11:30 AM.
CRYPTOCURRENCY: Cryptocurrencies are suffering on Wednesday after a slide rocked Wall Street and dragged down digital assets.
Bitcoin has fallen over 8% in the last 24 hours to hold at around $20,300. The top cryptocurrency traded near $22,400 on Tuesday before a selloff that gripped markets, snapping Bitcoin’s four-day winning streak and posting its most dramatic daily drop since June. Analysts have suggested that Bitcoin could stop sliding between $18,300 and $19,500 if it falls further.
Ethereum, which is expected to see an expected upgrade between today and tomorrow, also saw a sharp decline today, retreating more than 7% and losing the $1,600 level. Some experts say The Merge, as they call Ethereum’s upgrade, will be a turning point into something bigger, while others say the cryptocurrency’s surge over the past month has already had gains built in after rising nearly 90%. month.
A court in South Korea issued an arrest warrant on Wednesday for Do Kwon, the founder of Terraform, the company behind the algorithmic stablecoin UST, Reuters reported, citing a prosecutor’s spokesman, following the implosion of the Terra platform in May. leading to approximately $60 billion in losses between UST and its sister cryptocurrency Luna. UST, a stablecoin that was supposed to be pegged 1:1 to the US dollar, pulled away from its target price in mid-May and sparked a broad selloff in the cryptocurrency market.
Bitcoin: -9.73%, to $20,349.80
Ethereum: -7.73%, to $1,598.79
Classic Land: -17.06%
FUTURE INDEXES – 7:50 am:
MinFe Dailan: -0.69%
NOTE: This material is a voluntary, independent work, the result of a compilation of data published on several Internet sites, which are summarized here in a didactic way to facilitate and speed up the reader’s understanding. The text of the Asian session is in the past tense, while the European and American sessions are in the present tense due to the time of writing this report. Pay attention to the time of data availability. The text is not an indication of the purchase, holding or sale of assets.