Singapore October 7 2022: Stocks in Asia slipped as traders digested disappointing earnings from chipmakers that may foreshadow a wider decline in corporate profits. Uncertainty also increased ahead of US monthly payrolls data.
The MSCI Asia Pacific Index dropped for the first time in four days, with tech shares the biggest losers. Samsung Electronics Co. reported a decline in profit for the first time since late 2019, underscoring the depth of a global PC and memory chip downturn. Advanced Micro Devices Inc. slid in late US trading after worse-than-expected preliminary results.
US equity contracts edged lower following declines for a second day on Thursday, with the S&P 500 and tech-heavy Nasdaq 100 both ending near session lows.
Treasuries and the dollar were both little changed.
The US jobs report is forecast to show employers added another 255,000 workers in September. That would be the fewest jobs added in a month since a decline in late 2020, but it’s still a robust advance. The unemployment rate is seen holding near a five-decade low of 3.7%, and average hourly earnings are set for another solid advance.
The drumbeat of hawkish comments from Federal Reserve officials kept stocks on the back foot for much of the US session, thwarting brief attempts to rebound.
Chicago Fed President Charles Evans said the benchmark rate will probably be at 4.5% to 4.75% by next spring as officials fret over high core inflation. Rates markets currently price a peak around 4.6% in the first half. Minneapolis Fed’s Neel Kashkari said the central bank is “quite a ways away” from pausing its campaign of rate increases, while Cleveland Fed chief Loretta Mester said the US is in an unacceptably high inflation environment.
Elsewhere, Canada’s two-year yields rose the highest level since 2007 after central bank Governor Tiff Macklem said he remained firmly on a rate-hiking path amid worries about elevated domestic price pressures and inflation expectations becoming entrenched. The pound continued its rocky trajectory, tumbling back below $1.12, while UK gilt yields jumped as traders braced for an end of the central bank’s market backstop.
Oil topped $88 a barrel and gold fell. Bitcoin hovered around $20,000.
Key events this week:
US unemployment, wholesale inventories, nonfarm payrolls, Friday
BOE Deputy Governor Dave Ramsden speaks at event, Friday
Fed’s John Williams speaks at event, Friday
Some of the main moves in markets:
S&P 500 futures fell 0.1% as of 10:34 a.m. Tokyo time. The S&P 500 fell 1%
Nasdaq 100 futures lost 0.2%. The Nasdaq 100 fell 0.8%
Japan’s Topix index dropped 0.6%
South Korea’s Kospi index slid 0.5%
Hong Kong’s Hang Seng Index slumped 1.1%
Australia’s S&P/ASX 200 Index decreased 0.6%
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at 0.9793 per dollar
The British pound was at 1.1157 per dollar
The Japanese yen rose 0.1% to 145.02 per dollar
The offshore yuan slipped 0.2% to 7.1013 per dollar
The yield on 10-year Treasuries was at 3.83%
Australia’s 10-year yield advanced almost eight basis points to 3.85%
Bitcoin fell 0.3% to $19,992
Ether fell 0.6% to $1,355
West Texas Intermediate crude was at $88.50 a barrel
Gold fell 0.1% at $1,710.90 an ounce