Marketmind: Losing the Plot

A look at the day ahead from Julien Ponthus

Came Monday morning though, default worries surrounding Chinese property firm Evergrande triggered a selling storm the likes of which had not been seen for a while. Alongside headlines generated by surging gas prices ahead of winter.

This may not be China’s ‘Lehman moment’, as some have billed it, even if there was a sense of deep finanical trouble on Monday, when Wall Street looked on course for its worst session since its March 2020 crash.

The turmoil came despite two extremely positive developments for equities: the relaxation of U.S. travel restrictions which saw airlines shares skyrocket and Pfizer saying data showed its COVID-19 vaccine was safe and protective in children.

So global markets have stabilised, with MSCI’s index of Asia-Pacific shares outside Japan down only 0.2%, while European and U.S. futures are pointing higher.

Whether this reprieve lasts or proves fleeting will become evident soon — the Fed concludes its meeting on Wednesday and Evergrande is due some bond interest payments on Thursday.

What investors would like to see from the Fed is some sign of a ‘Powell Put’, essentially that the central bank boss might intervene somehow to backstop markets. More realistically, few believe current market instability will change Fed thinking of when the economy might be ready for higher interest rates.

So focus might be on whether hotter-than expected inflation will cause the median of the Fed’s forecasts for the interest rate liftoff to switch to 2022 from the current 2023.

Key developments that should provide more direction to markets on Tuesday:

– UK public borrowing overshoots forecasts in August

-Britain is considering state loans for energy companies

– Universal Music valued around $39 billion ahead of stock market debut

– Australia c.bank wary in case Delta slows recovery

– Norway to end era of zero interest rates as economy recovers

– Canada’s Trudeau wins another minority in election, claims ‘clear mandate’

– UN General assembly (until Sept 24)

– Biden speech at U.N. to stress U.S. focus on ‘intensive diplomacy,’ official says

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Julien Ponthus; editing by Sujata Rao)

 

Asia-Pacific Shares Mixed Ahead of US Inflation Data; Cyclicals Drive Japan’s Nikkei to More Than 31-Year High

The major Asia-Pacific stock indexes traded mixed on Tuesday, with investors eyeing U.S. inflation data for more clues on when the Federal Reserve will begin reducing its massive stimulus.

Locally, investors remained on edge over China’s tightening grip on its technology companies and a widening liquidity crunch for the country’s most indebted developer.

Cash Market Recap

In Japan, the Nikkei 225 Index settled at 30670.01, up 222.73 or +0.73%. Hong Kong’s Hang Seng Index is trading 25501.32, down 312.49 or -1.21% and South Korea’s KOSPI Index finished at 3148.83, up 20.97 or +0.67%.

In China, the benchmark Shanghai Index settled at 3662.60, down 52.77 or -1.42% and in Australia, the benchmark S&P/ASX 200 closed at 7437.30, up 12.10 or +0.16%.

US Consumer Inflation Data on Tap

The U.S. is scheduled to release its August report on consumer inflation at 12:30 GMT. The Consumer Price Index (CPI) is expected to show core consumer prices rose 0.3% in August. Prices were up 0.3% the previous month and 0.9% in June. Economists expect annual inflation to ease slightly to 4.2% from 4.3% in July.

China Shares Fall as Evergrande Woes Weigh on Property, Financials

Chinese shares closed lower on Monday, dragged by real estate and financials after the country’s most-indebted developer warned of a risk of a cross-default.

Property developers tumbled 3.8%, while the financials sub-index shed 2.9% after cash-strapped China Evergrande Group warned of a risk of cross-default as real estate sales continued to plunge.

The developer’s struggles to quickly sell off assets and avert defaults on its massive liabilities are raising the risk of contagion for other privately-owned developers, fund managers and analysts say.

Japan’s Nikkei Ends at Over 31-year High as Cyclicals Shine

Japan’s Nikkei closed at a more than 31-year high on Tuesday, led by cyclical stocks tracking overnight Wall Street gains, while progress in domestic vaccine rollouts raised hopes for an economic reopening.

Sentiment was also boosted by hopes for an economic reopening as Japan is on track to reach the vaccination levels of the United States and Europe. The government said on Tuesday more than 50% of Japan’s population have been fully vaccinated.

South Korean Stocks End Higher Ahead of US inflation Data

South Korean shares ended higher on Tuesday, buoyed by foreign buying after overnight gains on Wall Street, while investors awaited U.S. August inflation data due at 12:30 GMT.

Among the heavyweights, chip giants Samsung Electronics and SK Hynix rose 0.39% and 0.94%, respectively, while platform companies Naver and Kakao fell 1.35% and 0.40%, respectively.

Foreigners were net buyers of 294.0 billion won ($251.14 million) worth of shares on the main board.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Rises vs Most Currencies as Fed Taper Talk Gathers Pace

The greenback, however, came off its highs in afternoon trading.

The dollar index earlier rose to 92.887, its highest since Aug. 27. It was last up slightly at 92.664.

A round of U.S. economic data is due out this week, starting with consumer prices on Tuesday, which will give the latest update on how hot inflation has been ahead of next week’s Fed meeting.

Philadelphia Fed President Patrick Harker became the latest official to say he wants the central bank to start tapering this year, saying in a Nikkei interview that he was keen to scale back asset purchases.

Tapering talk has boosted the dollar, said Erik Nelson, macro strategist at Wells Fargo Securities in New York.

“We noticed from the Fed communication that they would like to de-link the taper from the rate hike,” Nelson said. “But it will take a lot of convincing and frankly a lot of time for the market to change its reaction function. For now, a taper timeline is closely linked to a rate hike timeline in the market.”

Tapering typically lifts the dollar as it means a step toward tighter monetary policy. It also means the Fed will be buying fewer debt assets, which suggests there will be fewer dollars in circulation.

The Wall Street Journal reported on Friday that Fed officials will seek an agreement to begin paring bond purchases in November.

Aside from inflation, U.S. retail sales and production figures are also scheduled for release this week.

“Another high CPI (consumer price index) reading this week in the face of weakening economic data could begin to paint the Fed into a corner as pressure mounts for stimulus normalization,” said Christopher Vecchio, senior analyst at DailyFX.com, the research unit of forex broker IG.

The euro was among the currencies to lose ground to the dollar, dipping to $1.1770, its lowest in a little over two weeks, after the European Central Bank said last week it would start to trim its own emergency bond purchases. The euro was last down 0.1% at $1.1801.

Against the yen, the dollar was up 0.1% at 110 yen. The dollar also gained 0.5% versus the Swiss franc to 0.9228.

In the cryptocurrency market, bitcoin was down 2.8% at $44,762.

Litecoin, with a market cap of nearly $12 billion and one of the earliest digital currencies in circulation, fell 2.6% to $180.78, according to crypto data tracker CoinGecko, after Walmart Inc said a press release regarding the retailer’s partnership with the cryptocurrency was fake.

Litecoin rose as much as 27.4% on the fake news.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers and Saikat Chatterjee in London; Editing by Angus MacSwan, Will Dunham and Dan Grebler)

Global Stock Markets Slip on Inflation, Tax, Regulation Worries

Leading U.S. House of Representatives Democrats said they are seeking to raise the tax rate on corporations to 26.5%, up from the current 21%.

The U.S. consumer price data due out on Tuesday will give a broad picture of the economy’s progress ahead of the Federal Reserve’s meeting next week.

The MSCI world equity index, which tracks shares in 45 nations, shed 0.22%, while U.S. stocks were mixed.

The Dow Jones Industrial Average rose 0.4% and the S&P 500 fell 0.17%. The Nasdaq Composite dropped 0.4%, as investors pivoted away from major technology stocks to sectors more likely to benefit from an economic bounce later this year.

The dollar climbed to a two-week peak against a basket of major currencies as investors priced in the possibility that the Federal would reduce its asset purchases.

“Investors are grappling with an unusually wide range of potential economic outcomes beyond the post-pandemic restart, reflected in frequent shifts in equity market leadership and volatile bond yields,” said Vivek Paul, senior portfolio strategist at BlackRock Investment Institute.

The yield on 10-year Treasury notes was down 2 basis points to 1.321%.

European stocks ended higher for the first time in five days on hopes that a strong euro zone economic recovery can outweigh risks of a global slowdown. The pan-European STOXX 600 index was up 0.3% after hitting a three-week low last week.

Asian stocks fell earlier in the day following news of a fresh regulatory crackdown on Chinese firms.

China fired a fresh regulatory shot at its tech giants, telling them to end a long-standing practice of blocking each other’s links on their websites. The Financial Times also reported that China is aiming to break up the payments app Alipay.

The Chinese blue-chip index fell 0.5% and MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.78% lower. Japan’s Nikkei rose 0.22%.

The core reading of the U.S. consumer price index is expected to show a rise of 0.3% in August, down from 0.5% the previous month and 0.9% in June.

The U.S. Federal Reserve is paying close attention to price pressures as it mulls when to begin to reduce its massive bond holdings and how soon to begin lifting rates from near zero. It also remains on the lookout for any signs that price pressures may broaden.

The general air of risk aversion helped lift the dollar index to 92.69, up 0.12%.

Oil prices rose to six-week highs as U.S. output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.

Brent crude settled up $0.59, or up 0.81%, at $73.51 a barrel. U.S. crude settled up $0.73, or up 1.05%, at $70.45 per barrel.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao in London and Elizabeth Dilts Marshall in New York; additional reporting by Wayne Cole in Sydney and Dhara Ranasinghe in London; editing by Emelia Sithole-Matarise, Will Dunham, Chizu Nomiyama and Dan Grebler)

Asia-Pacific Stock Indexes Finish Mostly Higher; Hang Seng Tumbles 1.5% as China Tech Crackdown Continues

The major Asia-Pacific stock indexes finished mixed on Monday with shares in Hong Kong taking a more than 1.5% hit following a Financial Times Report that Beijing wants to break up Ant Group’s Alipay and force the creation of separate loans app.

Shares in China manage to eke out a small gain despite a sharp drop in Chinese electric vehicles stocks, which fell after the country’s industry minister said consolidation in the sector is needed as there are “too many” EV makers in China. BYD dropped 2.14% while Xpeng slipped 2.35%, CNBC reported.

Cash Market Recap

Gains in China were also capped by a 34.57% plunge in shares of Chinese property developer Soho China after a takeover deal by Blackstone Group fell through. Soho China said in a filing on Friday that Blackstone has decided not to go through with its $3 billion bid to buy the developer.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 30447.37, up 65.53 or +0.22%. Hong Kong’s Hang Seng Index finished at 25813.81, down 392.10 or -1.5% and South Korea’s KOSPI Index closed at 3127.86, up 2.10 or -0.07%.

In China, the benchmark Shanghai Index settled at 3715.37, up 12.26 or +0.33% and in Australia, the benchmark S&P/ASX 200 Index finished at 7425.20, up 18.60 or +0.25%.

Hong Kong Shares Drop, Dragged Lower by Tech on Latest Crackdown

Hong Kong shares finished down on Monday, dragged lower by internet giants following a slew of moves by Beijing to crack down on the country’s technology sector, Reuters reported. Shares of tech giants Meituan, Alibaba Group and Tencent Holdings dropped 4.5%, 4.2% and 2.5%, respectively.

The latest moves in Beijing’s crackdown include telling delivery and ride-hailing firms to better protect workers, breaking up Ant’s Alipay and forcing creation of separate loans app, and telling internet giants to stop blocking each other’s website links from their platforms.

China’s Blue-Chips End Lower as Lending Data Disappoints

Chinese blue-chips ended lower on Monday, dragged down by semiconductors and tourism stocks, after official data showed new bank lending in Beijing rose less than expected last month, while Shanghai shares closed higher. Chinese banks extended 1.22 trillion yuan in new yuan loans in August, up from July but falling short of analysts’ expectations.

Aussie Shares Gain on Boost from Sydney Airport, Energy and Materials Stocks

Australian shares rose on Monday, boosted by airport operator Sydney Airport Holdings surging on an improved takeover bid and solid gains in the energy and material stocks.

Sydney Airport Holdings advanced as much as 5.1% to its highest in over a year after bidder Sydney Aviation Alliance increased its offer price to A$8.75 from prior proposals at A$8.45 and A$8.25, to acquire all shares in the airport operator.

Energy stocks rose 1.25% after oil prices hit a one-week high on concerns over U.S. supplies, along with higher demand hopes.

Major miners rose 1.06% led by lithium-boron supplier Ioneer Ltd, up 7.58%, followed by lithium miner Pilbara Minerals Ltd, gaining 7.32%.

For a look at all of today’s economic events, check out our economic calendar.

Marketmind: Hitting the Buffers

A look at the day ahead from Sujata Rao.

Yet there is no dismissing the brewing concerns — we seem to be past peak liquidity and peak growth, yet inflationary pressures show no sign of abating. Chinese factory gate prices have hit 13-year highs, the ECB just upped inflation projections and later on Friday, we will see what U.S. producer prices looked like in August. Remember last month brought the biggest annual increase in over a decade.

Warnings about input costs are coming through from companies too, with Nestle warning of even higher factory prices in 2022. The question is when these costs trickle down to consumers and their earnings; wage inflation, as we know, tends to be less easily tamed.

It comes as the post-pandemic growth rebound fizzles. Data shows Britain’s economy barely grew in July (versus expectations for a 0.6% expansion), even as tax hikes loom.

What of stimulus? The Bank of England appears well on the road to a 2022 interest rate rise while the Bank of Canada on Thursday flagged plans to stop adding new stimulus and to raise interest rates.

Policy has long been tightening across emerging markets and later on Friday, Russia will likely raise interest rate for the fifth time this year.

Finally, there is no getting away from the fact that the ECB — among the more dovish central banks — has hit peak QE, even though it was at pains on Thursday to describe its stimulus slowdown as recalibration rather than tapering.

So while equity futures signal a more cheerful session in Europe and Wall Street, stocks may face a rocky ride from here.

Key developments that should provide more direction to markets on Friday:

-U.S. President Joe Biden and Chinese leader Xi Jinping spoke for 90 minutes

-China Evergrande bonds rebound as loan payment extensions ease default worries

-Willis Towers Watson has $5 bln of capital, possibly for M&A

-Euro zone finance ministers meet

-Fed speakers: Cleveland President Loretta Mester 1300 GMT

Russia central bank meeting

Ratings: S&P: Ukraine, Ghana, Jordan, Malta; Moody’s: Montenegro

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao; Editing by Dhara Ranasinghe)

U.S. Shares Retreat, European Shares end Little-Changed

Major U.S. indexes were lower, pulling back from earlier gains but still close to all-time highs.

The Dow Jones Industrial Average fell 133.74 points, or 0.38%, to 34,897.33, the S&P 500 lost 14.45 points, or 0.32%, to 4,499.62 and the Nasdaq Composite dropped 4.28 points, or 0.03%, to 15,282.36 by mid afternoon.

Federal Reserve Bank Governor Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Earlier in the day, U.S. data showed the number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

After falling as much as 0.9% in morning trade, the pan-European STOXX 600 index ended largely unchanged around 467.57 points. The index had shed 1.5% over the past two days on fears of a more-hawkish-than-expected ECB.

Euro zone bonds yields tumbled as the European Central Bank took its first tentative step in withdrawing COVID-era stimulus. Southern Europe led a fall in euro zone sovereign bond yields.

The euro rose 0.15% against the dollar, climbing for the first time in four sessions, while bond markets cheered by sending French 10-yields negative again.

“We’re seeing some modest weakness mainly because the market is just in flux. There is no real clarity on when we will start to see the Fed and ECB start to pull back stimulus,” said Edward Moya, a senior market analyst with OANDA in New York.

Instead of hinting at any potential end date for its pandemic-era purchase programme, European Central Bank President Christine Lagarde instead channelled the spirit of former British Prime Minister Margaret Thatcher, saying: “The lady isn’t tapering.”

Germany’s 10-year yield, the benchmark for the bloc, fell. [GVD/EUR]

FRAGILE CHINA

MSCI’s benchmark for global equity markets fell 0.33% to 740.33. Emerging markets stocks fell 1.18%.

The UK’s FTSE 100 dropped 1% with low-cost airline easyJet tumbling over 10% as it tapped shareholders for 1.2 billion pounds ($1.7 billion). [.EU]

MSCI’s broadest index of Asia-Pacific shares ended down 1%, which was its worst daily performance since Aug. 19, the last time markets decided they were worried about the U.S. Federal Reserve tapering its massive asset purchase programme.

Chinese tech giants Tencent, NetEase and Alibaba had slumped 8.5%, 11% and 6% respectively after online gaming chiefs were summoned by authorities to check they are sticking to strict new rules for the sector.

“The global story is looking soft and it’s being hit by the Delta variant plus concern about potentially the Fed still moving towards a taper,” said Rob Carnell, Asia head of research at ING. “It’s an unsettling combination of things.”

The China angst had meant Hong Kong, where many heavyweight Chinese firms are also listed, shed 2.3%.

News that Chinese authorities had told gaming firms to resolutely curb incorrect tendencies such as focusing “only on money” and “only on traffic” had hurt companies with large gaming operations. Tencent fell 8.5%, Bilibili lost nearly 9% and NetEase slumped 11%.

There was more turbulence too for the country’s most indebted property giant, Evergrande.

Media reports the company would suspend some interest payments on loans and payments to its wealth management products sent its shares down more than 10% at one point, although they recovered almost half of the drop on news that some creditors had agreed to loan payment extensions.

Korea’s Kospi fell 1.5%, also under pressure from regulatory scrutiny of local tech players. In Korea’s case, fintech names such as Kakao Corp , which sank 7.2%, and Naver Corp, down 6.9%, were in the spotlight.

Australian stocks lost nearly 2% after payrolls data showed a sharp drop in jobs in the first half of August.

Gold steadied in choppy trading, buoyed by a slight retreat in the dollar. Spot bullion prices were up 0.4%.

Oil prices fell on China’s plan to tap state reserves and a smaller-than-expected drawdown in U.S. crude supplies.

Brent crude was last down $1.14, or down 1.57%, at $71.46 a barrel. U.S. crude was last down $1.16, or down 1.66% at %68.15.

($1 = 0.7246 pounds)

(Additional reporting by Alun John in Hong Kong; Editing by Carmel Crimmins and Nick Zieminski)

Worries Over Economic Recovery Shake World Stocks, Wall Street

Accommodative central bank policies and optimism about reopening economies have pushed equities to record levels but concerns are growing about the impact of rising coronavirus infections due to the Delta variant.

Markets are also still assessing data from last week which showed the U.S. economy created the fewest jobs in seven months in August, and wondering how the U.S. central bank will respond.

The Fed should move forward with a plan to taper its massive asset purchase programme despite the slowdown in job growth, St. Louis Federal Reserve Bank President James Bullard said in an interview with the Financial Times on Wednesday.

“Everything is tapering, tapering, tapering. We are looking at every single central bank – when is the next one?” said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management, though he added: “The Delta variant impact is still running like a wild card”.

The Dow Jones Industrial Average fell 76.74 points, or 0.22 percent, to 35,023.26, the S&P 500 lost 7.8 points, or 0.17 percent, to 4,512.23 and the Nasdaq Composite dropped 87.96 points, or 0.57 percent, to 15,286.37 by 2:17 p.m. EST (18:17 GMT).

MSCI’s world equity index fell 0.41% by after seven consecutive days of gains.

European stocks fell 1% and hit their lowest in nearly three weeks. Britain’s FTSE 100 struck two-week lows, down 0.75%.

“September is the month investors confront reality,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, pointing to uncertainty over the Fed’s tapering plans and inflation fears as a reason investors are taking profits or reallocating funds.

The coronavirus Delta variant and concerns over the economic recovery were also weighing.

“What is likely ahead of us is a continued but temporary deceleration of economic activity of one to three months which likely started in August,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Federal official Robert Kaplan was due to speak later on Wednesday.

In Europe, markets are focused on whether the European Central Bank will this week begin to scale back its bond purchase programme.

The dollar paired some gains after jumping to a one-week high against a basket of other major currencies. It also hit a one-week peak against the the single currency and was trading at $1.1826.

The dollar’s strength offset investors’ risk aversion to pressure bullion to a two-week low. Spot gold prices fell 0.1%.

Longer-dated U.S. government bond yields slipped on Wednesday coming off a two-day climb after labor market data and ahead of an auction by the Treasury in 10-year notes. Yields on 10-year Treasury notes fell to 1.3495%, retreating from this week’s eight-week highs.

Germany’s 10-year Bund yield also hit eight-week highs before edging lower to -0.32% .

“Fears that central banks might start to taper their asset purchases seems to have knocked away a little confidence, particularly given tomorrow’s ECB decision where many expect we’ll begin to see the start of that process, not least with inflation there running at its highest levels in almost a decade,” Deutsche Bank analysts said in a note.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.77%, stemming an eight-session string of gains.

Chinese blue chips dropped 0.41%, weighed down by recent soft data in the world’s second-biggest economy.

But Japan’s Nikkei jumped 0.89% and hit a five-month high, helped by revised gross domestic product growth figures beating expectations.

Bitcoin continued its rout, down 1.1%.

Shares of Coinbase Global Inc dropped over 2% after the firm revealed it has received a legal notice from the top U.S. markets regulator.

U.S. crude oil jumped 1.39% to $69.32 a barrel and Brent crude rose 1.4% to $72.69 per barrel, with prices supported by a slow restart to production in the Gulf of Mexico after Hurricane Ida hit the region.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Alun John in Hong Kong; Editing by Kenneth Maxwell & Shri Navaratnam, Editing by William Maclean and Nick Tattersall)

Marketmind: Time to Join the Green Bond Gang

A look at the day ahead from Dhara Ranasinghe.

Germany on Wednesday will sell 10-year green bonds, a day after Spain’s debut green bond garnered an impressive 60 billion euros of demand.

Green debt issuance globally, recently passed $1 trillion for the first time, with 90% of sovereign issuance coming from Europe. Britain will sell its first green bond later this month while the European Union plans its first green issue in October.

A greenium index compiled by UniCredit, has risen to 4 basis points, its highest level, indicating that demand for green paper remains strong and investors are willing to pay a premium to buy green European government debt.

Back to Germany. The benchmark euro zone debt issuer wants to be the first to establish a green bond yield curve and Wednesday’s issuance takes it a step closer to that goal.

Another market that’s seen action this week is Bitcoin. It seems to have stabilised after a 17% plunge on Tuesday, the day it become legal lender for the first time in a sovereign state. However El Salvador’s bitcoin adoption was clouded by the price fall as well as technological glitches and protests by mistrustful citizens.

Global stock markets too have stablised after Tuesday’s wild swings but growth concerns are weighing, with Asian shares down, Europe falling also 1% and U.S. equity futures a touch higher.

Later in the day, watch for U.S. JOLTS job openings data and a raft of Fed speakers. And on Wall Street, GameStop, the original ‘meme stock,’ releases earnings.

Key developments that should provide more direction to markets on Wednesday:

– UK supermarket Morrisons is talking to its private equity suitors and the UK Takeover Panel regarding an auction to settle its future ownership.

– Deutsche Bank, Commerzbank CEOs attend Handelsblatt conference

– Japan upgrades Q2 GDP on stronger business spending

– PayPal heats up buy now, pay later race with $2.7 bln Japan deal

– Interest rate meetings in Canada, Poland, Croatia.

– Fed speakers: New York President John Williams 1710 GMT; Dallas President Robert Kaplan 2200 GMT; Boston Fed President Eric Rosengren, Minneapolis Fed President Neel Kashkari 1800 GMT

– U.S. auctions 10-year bonds.

– US JOLTS job openings, Initial jobless claims, consumer credit

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Dhara Ranasinghe)

 

European Stocks Fall 1% on Growth Worries

The Europe-focussed STOXX 600 index fell 1% by 07:12 GMT – on course for its biggest daily decline in three weeks – after losses overnight on Wall Street’s benchmark S&P 500 and Asian stocks.

Swedish investment company EQT fell 5.9% after a share placing deal, while Stellantis dropped 2.5% after Dongfeng Motor Hong Kong said it had sold shares in the carmaker for about 600 million euros ($710 million).

French drugmaker Sanofi slipped 1.4% after it agreed to buy U.S. biopharmaceutical company Kadmon Holdings Inc in a $1.9 billion deal.

British industrial technology company Smiths Group rose 3.8% after it agreed to sell its medical unit to U.S.-based ICU Medical Inc for $2.4 billion.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)

 

World Equities Under Pressure as Economic Worries Mount

Key U.S. equity benchmarks were down and the MSCI world equity index retreated from a record hit overnight, following seven consecutive days of gains to all-time highs. Earlier in the session, hopes of extra stimulus in Japan and strong China trade data had boosted Asia shares.

The Dow Jones Industrial Average fell 209.2 points, or 0.59%, to 35,159.89 and the S&P 500 lost 9.96 points, or 0.22 percent, to 4,525.47 by 2:22 p.m. ET (18:22 GMT). The Nasdaq Composite bucked the trend, adding 0.18% to 15,391.26.

“The combination of exorbitant expectations, nosebleed valuations and slowing macro environment make the go-forward reward/risk outlook less attractive,” said Jeffrey Carbone, managing director at Cornerstone Wealth in Huntersville, North Carolina.

European stocks retraced ahead of an ECB policy meeting on Thursday. The STOXX 600 benchmark fell 0.5% but were not far from last month’s lifetime peak hit.

Data on Friday showed the U.S. economy created 235,000 jobs in August, the fewest in seven months as hiring in the leisure and hospitality sectors stalled, reducing expectations that the Fed will opt for an early tapering of its monthly bond purchases.

The market took the surprisingly soft U.S. payrolls report on Friday “in stride, with the assumption that the COVID-19 Delta variant had an impact on economic activity in August,” Arthur Hogan, chief market strategist at brokerage National Holdings in New York, said in a market note.

Speeches by a number of U.S. policymakers later this week will be closely watched for any indication about how the weak jobs report has impacted the Fed’s plans on tapering its bond purchases and keeping its expansive policy for the near-term.

The recent equity rally started after Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium in August.

“Given that before Jackson Hole many FOMC members had come out in favor of tapering on a tight timetable, we’ll see if they confirm, or align with Powell’s more moderate message,” said Giuseppe Sersale, fund manager at Anthilia.

U.S. government bond yields rose on Tuesday, continuing the climb seen on Friday in the wake of the jobs report and ahead of a fairly busy week of Treasury auctions.

Japanese shares rallied further on hopes the ruling Liberal Democratic Party will offer additional economic stimulus and easily win an upcoming general election after Prime Minister Yoshihide Suga said he would quit.

Tokyo’s Nikkei crossed the 30,000 mark for the first time since April, also helped by an announcement on its reshuffle, and the broader Topix index climbed 1.1% to a 31-year high.

Anthilia’s Sersale said investors had a defensive positioning on Japanese stocks that led to a short squeeze.

“I was positive on Tokyo (stocks) and remain so, but perhaps at this point it is better to look for a less overbought entry point,” he said.

Mainland Chinese shares extended gains, with the Shanghai Composite rising 1.5% to its highest since February, helped by Chinese trade data showing both exports and imports grew much more quickly than expected in August.

“The mood is improving on hopes the government will take measures to support the economy and that the monetary environment will be kept accommodative,” said Wang Shenshen, senior strategist at Mizuho Securities.

A rout in bonds and shares of China Evergrande Group deepened on Tuesday after new credit downgrades on the country’s No. 2 developer.

The euro retreated 0.16% at $1.1849, while Europe’s broad FTSEurofirst 300 index dropped 0.46% to 1,821.56.

The ECB is seen debating a cut in stimulus, with analysts expecting purchases under its Pandemic Emergency Purchase Programme (PEPP) falling, possibly as low as 60 billion euros a month from the current 80 billion euros.

Germany’s 10-year yield hit its highest since mid-July.

The Australian dollar briefly rose after the central bank went ahead with its planned tapering of bond purchases, but quickly gave up those gains after the bank reiterated its need to see sustainably higher inflation to raise interest rates.

The Aussie fell 0.6%, off its 1-1/2-month high set on Friday.

The U.S. dollar rose 0.3% against a basket of other major currencies, pressuring gold prices. Spot bullion prices were down 1.4%. U.S. gold futures settled 1.9% lower at $1,798.5 an ounce.

Elsewhere in commodities, oil prices slid on concerns over weak demand in the United States and Asia. Saudi Arabia’s sharp cuts to crude contract prices for Asia had earlier revived demand concerns.

Brent crude futures fell 1.02% to $71.46 per barrel, while U.S. crude futures declined 1.75% to $68.08.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chris Prentice in Washington, Danilo Masoni in Milan and Hideyuki Sano in Tokyo; Editing by Jane Merriman, Dan Grebler and Alex Richardson)

Global Stock Benchmark at New High, Dollar Slips

Labor Department data that showed wages increasing more than expected in August raised inflation fears and led longer-dated Treasury yields to jump, while gold advanced to a more than a 2-1/2-month high as the dollar eased.

MSCI’s all-country world index, which is heavily weighted to big U.S. tech, notched a new record as Apple Inc, Amazon.com Inc, Google parent Alphabet Inc and Facebook Inc advanced. The tech gains also helped the Nasdaq set a fresh closing high.

The Dow Industrials and S&P 500 fell as slower U.S. jobs growth raised questions about the pace of the recovery. But a Fed taper announcement is off the table in September, said Lee Ferridge, North American head of multi-asset strategy at State Street Global Markets.

“Support from the Fed for these markets is going to persist. Taper starts later rather than sooner. That’s positive for equities, that’s positive for risk,” he said.

“As long as the Fed is printing, then that means that the equity markets are supported by the whole QE liquidity argument,” Ferridge said.

U.S. employers created the fewest jobs in seven months in August as the Delta variant hurt the leisure and hospitality sector, but a 0.6% increase in wages showed underlying strength in the economy, the jobs report showed.

Nonfarm payrolls increased by 235,000 in August, well short of the 728,000 forecast by economists in a Reuters poll. But the unemployment rate fell to 5.2% from 5.4% in July.

MSCI’s ACWI, which is 60% U.S. equities, rose 0.11% to 746.46, while the Nasdaq gained 0.21%.

The S&P 500 index edged 0.03% lower and the Dow Jones Industrials fell 0.2%. The broad STOXX Europe 600 index of pan-regional stocks closed down 0.56%.

Euro zone business activity, meanwhile, remained strong last month, IHS Markit’s survey showed, suggesting the bloc’s economy could be back to pre-COVID-19 levels by year-end despite fears about the Delta variant.

The European Central Bank meets next week amid callsfrom several hawkish members to slow its pandemic-era asset purchase program. A Reuters poll sees the bank announcing acut to its asset purchases, given a recent spike in inflation.

Yields on the benchmark 10-year Treasury note rose 3 basis points to 1.324% as the U.S. labor report showed a jump in hourly earnings, a potential sign of future inflation.

The dollar index dropped to a low of 91.941, its lowest level since Aug. 4, and was last down 0.09% at 92.1320.

The euro traded flat at 1.1875. Markets are starting to react to the potential for more sustained euro zone inflation and reduced stimulus from the ECB.

The yen slid 0.19% to 109.72.

JAPAN JUMPS, CHINA EASES

Japanese shares jumped after officials said Prime Minister Yoshihide Suga would step down, setting the stage for a new premier after a one-year tenure marred by an unpopular COVID-19 response and rapidly dwindling public support.

Japan’s TOPIX stock index rose to a 30-year high and was last up 1.61%, with the Nikkei gaining 2%. Asian shares are still off their peaks from earlier in the year however, and lagging those elsewhere.

Meanwhile, Chinese blue chips were down 0.5% and Hong Kong was off 0.72% after activity in China’s services sector slumped into sharp contraction in August, a private survey showed on Friday, hurt by restrictions imposed to curb the Delta variant.

Oil prices slipped on the U.S. labor report showing a patchy recovery from the pandemic, but losses were capped by concerns U.S. crude supply would continue to be limited in the wake of Hurricane Ida, which cut offshore U.S. production.

Brent crude futures fell 42 cents to settle at $72.61 a barrel. U.S. crude slid 70 cents to settle at $69.29 a barrel.

Gold advanced more than 1% to its highest in 2-1/2 months as weak U.S. jobs growth drove the dollar lower and cast doubts on the Fed’s tapering timeline.

U.S. gold futures settled 1.2% higher at $1,833.70 an ounce.

(Reporting by Herbert Lash in New York, additional reporting by Huw Jones in London, Alun John in Hong Kong and Kevin Buckland in Tokyo; Editing by Andrea Ricci and Rosalba O’Brien)

Marketmind: Jobs and Japan

That was until Japanese Prime Minister Yoshihide Suga announced he would step down after failing to control the COVID-19 outbreak, setting the stage for a new premier.

And then there’s China data, showing the services sector slumping into sharp contraction in August as restrictions to curb the Delta variant threatened to derail the recovery in the world’s second-biggest economy.

However, change can be a good thing and bad data can spur hopes of more stimulus.

Japanese stocks soared 1.5% to a three-decade peak, as Suga’s departure reduces risks of a big loss for his party at elections later this month.

Equities in Europe and the U.S. look on track to end the week on a high, though Chinese shares slipped almost 1%.

All that optimism has knocked the dollar to one-month lows, and kept a lid on global yields while commodities continued their rebound.

But back to payrolls: the United States is expected to have added 728,000 jobs in August, after weekly data on Thursday showed layoffs at their lowest level in almost a quarter of a century.

Nearly 1.9 million jobs were created in June and July, and economists gradually trimmed their forecasts for August in recent days. Elsewhere though, the day looks thin on data with final PMIs and retail sales due for the euro zone.

On the corporate front, UK homebuilder Berkeley is the latest to flag construction cost inflation due to the usual labour and supply chain bottlenecks

Key developments that should provide more direction to markets on Friday:

Struggling Japan PM Suga steps down

China’s August services activity slumps into contraction

Emerging markets-focused investment firm Ashmore says pre-tax profit rose 28% in H1 ; French investment firm Antin plans IPO

Composite final PMIs

Euro zone retail sales

U.S. non-farm payrolls

Moody’s reviews Spain’s credit rating

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Karin Strohecker)

 

Stocks Charge Ahead on U.S. Data, Dollar Eases Ahead

Economic data from Asia and Europe was largely disappointing but the Labor Department report showed the number of Americans filing new claims for jobless benefits fell last week to a pandemic-era low.

The decline in layoffs to their lowest in more than 24 years helped ease concerns about the state of the U.S. economy even if the closely watched employment report for August on Friday shows a slowdown in nonfarm payrolls growth.

MSCI’s all-country world index climbed to a new peak, while the S&P 500 and Nasdaq also set new intraday highs. Energy-led value, up about 0.44%, outpaced a 0.09% decline in growth as Microsoft and Facebook fell, the latest twist in an ever-changing market leadership.

“We don’t really have anything that you can hang your hat on and say this is where we’re going, this is the sector that I need to be involved in,” said JJ Kinahan, chief market strategist at TD Ameritrade.

“You’re going to continue to see this back-and-forth type of trade,” he said.

MSCI’s world stock index, which measures equity performance in 50 countries, rose 0.19% after paring earlier gains, and was still on track to post its fifth consecutive closing high.

On Wall Street, the Dow Jones Industrial Average rose 0.23%, the S&P 500 added 0.16% and the Nasdaq Composite advanced 0.07%.

Overnight in Asia, uncertainty over still-low vaccination rates in many economies and China’s zero-tolerance COVID-19 strategy kept Chinese blue-chips flat, though speculation about more fiscal stimulus offered some support.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.16%. Japan’s Nikkei added 0.3%, South Korea fell 1%, whereas Hong Kong’s battered tech index enjoyed a fourth day of unbroken gains.

The euro traded near a one-month high versus the greenback after German central bank chief Jens Weidmann cautioned against inflation risks and urged slowing the European Central Bank’s bond buying.

Also on Wednesday, ECB President Christine Lagarde said the euro zone economy was recovering and only needed “surgical” support targeted at sectors that still struggle.

The euro was up 0.27% at $1.1869.

The hawkish comments were in contrast to the Bank of Japan, which has shown no sign of tapering its massive purchases as the economy remains mired in a decades-long battle with deflation.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.262% to 92.247. The yen last traded down 0.02% at $109.9700.

U.S. Treasury yields drifted lower as the market remained on hold ahead of the government’s closely watched employment data on Friday, which could break yields out of a tight range.

The benchmark 10-year yield fell 0.7 basis points to yield 1.295%.

Aluminium prices rose to a 10-year high on growing concerns that restrictions on Chinese production of the metal are causing supply shortages.

Oil rose more than $1, supported by optimism about the pace of the economic recovery from the pandemic, a sharp decline in U.S. crude stocks and a weaker dollar.

Brent crude settled up $1.44 at $73.03 a barrel. U.S. crude rose $1.40 to settle at $69.99 a barrel.

U.S. gold futures settled down 0.3% at $1,811.50 an ounce.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Sujata Rao in London; Editing by Catherine Evans, Nick Tattersall and Sonya Hepinstall)

Google Intends To Insert Its Own Chips In Chromebook laptops By 2023

Google is working on its own chips and intends to start inserting them in its Chromebook laptops from 2023, a move that could affect some of the leading chip manufacturers in the world.

Google Is Developing Its Chips

US tech giant Google is currently working on its chips and intends to roll them out by 2023. This is according to an earlier report by Nikkei Asia, citing people familiar with the matter. According to the report, Google is developing its central processors for its tablet and notebook computers.

This latest development implies that Google considers in-house chip development as a crucial component for the company to remain competitive. The chips are key to the function of any device. They operate as the brains, ensuring that every aspect of a device runs as expected.

At the moment, Google utilizes chips manufactured by other tech giants like Intel and AMD to power its tablet and notebook computers. However, the Google chip currently in design is based on a design by British chip designer Arm.

Google considers the move to be crucial as other leading tech companies, including Amazon, Facebook, Microsoft, Tesla, Baidu and Alibaba Group Holding, are working towards developing their own semiconductors to use for their cloud services and electronic products.

The report added that Google is also working on building mobile processors for its Pixel smartphones. The tech giant was inspired by Apple’s success in developing its own semiconductor components for its iPhones. Apple is also looking to replace Intel chips with its own CPUs for cloud services and electronic products.

Google Outperforms Several Tech Companies

Google has been one of the best performing tech stocks in the market, seeing its price surge by more than 60% year-to-date. GOOGL started 2021 trading at $1,722 per share but has gained more than 60%.

GOOGL stock chart. Source: FXEMPIRE

GOOGL is currently trading at $2,923 per share, up by 1% over the past 24 hours. The company’s performance has also been reflected in its earnings and revenue over the past few months.

Stocks Sit Near Record Highs as Jobs Report Looms

U.S. consumer confidence fell to a six-month low in August as soaring COVID-19 infections and rising inflation dampened the economic outlook, a view that data from China, Canada and the EU also implied.

China’s businesses and the broader economy came under increased pressure in August as factory activity expanded at a slower pace and the services sector slumped into contraction. In Canada, the economy unexpectedly shrank 1.1% in the second quarter on an annualized basis.

The Delta variant has cast a shadow on U.S. consumer optimism, which had soared earlier in the year on expectations vaccines would bring a return to normalcy, said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

“Consumers are increasingly aware of the near-term risks to the economic recovery created by rising prices and the COVID-19 resurgence,” Baird said in a note. But confidence is relatively high and consistent with solid consumer spending, he said.

Investors are taking some risk off the table after the U.S. and Chinese economies, the world’s two largest, showed signs of short-term weakness, said Edward Moya, senior market analyst at foreign exchange brokerage OANDA.

“The Delta variant’s impact on the U.S. economy might be greater than initially anticipated and that won’t bode well for third-quarter spending,” he said.

Markets mostly shrugged off a surge in euro zone inflation to a 10-year high in August, with further rises likely, as the European Central Bank’s narrative of temporary inflation and ultra-easy policy for years remained intact.

MSCI’s all-country world index traded up 0.04%, on track for another closing record high and its seventh month of consecutive gains.

In Europe, the broad STOXX Europe 600 index closed down 0.38% but notched its seventh straight month of gains – its best monthly winning streak since 2013. Technology was the best performing European sector in August, up 6% on several strong earnings reports.

On Wall Street, stocks seesawed near breakeven. The Dow Jones Industrial Average fell 0.15% and the S&P 500 slid -0.12%. The Nasdaq Composite rose 0.06%.

Stocks in emerging markets jumped, with MSCI’s EM index rising 1.71%.

Value slightly outpaced growth stocks, a change from Monday when technology shares jumped after Federal Reserve Chair Jerome Powell indicated last week that interest rates would remain low well past the beginning of the Fed’s bond-purchasing program.

The dollar slipped to its lowest level in more than three-weeks against a basket of currencies as investors await U.S. jobs data on Friday that could shape future Fed monetary policy. The greenback later pared losses to trade little changed.

The dollar index fell 0.06% to 92.639, while the euro was up 0.1% at $1.1809. The yen traded up 0.06% at $109.9800.

U.S. Treasury yields rebounded after earlier easing a bit following the U.S. consumer confidence data. The benchmark 10-year yield rose 1.8 basis points to yield 1.302%.

Benchmark German bond yields rose to the highest in more than five weeks after a higher-than-expected inflation reading and an ECB policymaker called on the bank to reduce its emergency bond purchases as soon as the fourth quarter.

Germany’s 10-year bund yield, the benchmark for the euro zone, rose as high as -0.376%.

Oil slipped as the Organization of Petroleum Exporting Countries and its allies geared up for a meeting on Wednesday amid calls from the United States to pump more crude, though Brent still traded well above $70 a barrel.

Brent futures fell 42 cents to settle at $72.99 a barrel. U.S. crude settled down 71 cents at $68.50 a barrel.

U.S. gold futures settled up 0.3% at $1,818.10 an ounce.

Asian shares overnight broadly recovered. MSCI’s gauge of Asia Pacific stocks outside Japan gained 1.6%, while Japan’s Nikkei 225 bounced back to rise 1.1% despite weak July industrial output data.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Herbert Lash; Editing by Alistair Bell and Sonya Hepinstall)

Global Equities Hit Record Highs; Oil Closes Higher

MSCI’s benchmark for global equity markets hit a record. The S&P 500 .SPX and Nasdaq also rose to all-time highs as dovish remarks from the Federal Reserve last week bolstered optimism in an economic rebound and eased fears of a sudden tapering in monetary stimulus.

The Dow Jones Industrial Average rose 5.8 points, or 0.02%, to 35,461.6, the S&P 500 gained 26.47 points, or 0.59%, to 4,535.84 and the Nasdaq Composite added 154.43 points, or 1.02%, at 15,283.93 by 3:06 p.m. ET (19:06 GMT).

The Europe-wide STOXX 600 rose 0.07% and was on course to end August with a rise of more than 2% – its seventh month of gains in what would be its longest such winning run in over eight years.

Asian stocks hit a two-week high and Japan’s blue-chip Nikkei closed up 0.5%.

Positive sentiment in equity markets was underpinned by Friday’s Jackson Hole speech by Fed Chair Jerome Powell in which he said tapering of stimulus measures could begin this year, but added the central bank would remain cautious.

“The questions now should pivot from the timing of the taper to its speed. How fast will the Fed reduce its purchases from the current $120 billion monthly rate?” said Christopher Smart, chief global strategist & head of the Barings Investment Institute.

“That will likely be determined by some of the data coming in this week, including U.S. consumer confidence and jobs, but also European inflation and Chinese PMIs.”

With the market focused on the “medium-term,” traders have seen any weakness as buying opportunities, said Pictet Wealth Management strategist Frederik Ducrozet.

“We are going from great to good – the outlook is not as great as it was earlier this year but it’s still consistent with further equity market gains,” he added.

Chinese shares remained the outlier, with the U.S.-listed shares of gaming firms such as NetEase Inc dropping on signs of further regulation.

Chinese regulators cut the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays, state media reported.

The new rules come amid a broad crackdown by Beijing on China’s tech giants, such as Alibaba Group and Tencent Holdings that has hammered Chinese shares traded at home and abroad.

OIL OFF HIGHS

Oil prices edged higher but were off a four-week high as Hurricane Ida weakened into a Category 1 hurricane within 12 hours of coming ashore.

Nearly all U.S. offshore Gulf oil production, or 1.74 million barrels per day, was suspended in advance of the storm.

Focus turned to a meeting of the Organization of the Petroleum Exporting Countries and its allies on Wednesday, with sources telling Reuters the group is likely to keep its oil output policy unchanged and continue with its planned modest production increase.

Brent crude futures settled up 71 cents at $73.42 a barrel after touching four-week highs. They rose more than 11% last week in anticipation of disruptions to oil production from Hurricane Ida.

U.S. oil rose 47 cents to $69.21 a barrel, having jumped a little more than 10% over the last week.

“Hurricane Ida will dictate oil’s near-term direction,” said Jeffrey Halley, senior market analyst at OANDA. “If Ida weakens and its path of destruction is lower than expected, oil’s rally will temporarily lose momentum here.”

In bond and currency markets, it was the Fed’s dovish tone that held sway, with Friday’s key U.S. jobs report in focus.

U.S. Treasury yields retreated as the market looked ahead to the release this week of the August employment report and the possibility it could factor into the timing of the Fed’s tapering announcement.

The 10-year U.S. Treasury yield was around 1.2852% , while the dollar index – which measures the greenback against a basket of currencies – edged higher after touching a two-week low.

The euro edged up to $1.18, off a three-week peak touched earlier in the session.

“If we get a (U.S. payrolls) number close to a million that would increase the odds of taper being announced in September, but if the number is line with expectations then there’s a 50-50 chance for a September move,” said Vasileios Gkionakis, global head of FX strategy at Lombard Odier Group.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chris Prentice and Dhara Ranasinghe; additional reporting by Alex Lawler in London; editing by Mark Potter, Bernadette Baum, Pravin Char and Richard Chang)

Stocks Fall, U.S. Yields Rise After Fed Officials Focus on Taper Timeline

Dallas Fed President Robert Kaplan said on Thursday it is still his view that the Fed in September would announce a plan for tapering to start in October or shortly thereafter.

His remarks followed comments by St. Louis Fed President James Bullard, who said the bank is “coalescing” around a plan to begin reducing its $120 billion in monthly bond purchases.

Powell is due to speak on Friday at the Federal Reserve’s annual Jackson Hole, Wyoming, policy symposium, which is being held virtually due to the spread of coronavirus cases in the region.

Minutes from the Fed’s July meeting released last week showed that the bulk of the bank’s policy-setting committee expect the Fed will start tapering its bond purchases later this year, though consumer sentiment and economic data have weakened since that meeting.

Following Kaplan and Bullard’s comments, benchmark 10-year Treasury note yields were at 1.3593%, the highest since Aug. 12.

“You’re going to see continued commentary around deciding when to start tapering. I think they want to have that digested by the market so it’s not a surprise when it begins later this year,” said Ryan Jacob, chief investment officer at Jacob Asset Management.

The MSCI world equity index, which tracks shares in 50 countries, was down 0.27%, while the pan-European STOXX 600 index fell 0.32%.

Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.65%.

On Wall Street, all three major indexes were trading lower in early afternoon, with stocks in consumer discretionary, technology, financials and consumer staples among the biggest losers.

“Trading is very thin today, so it doesn’t take much to move the market,” Jacob said.

The Dow Jones Industrial Average fell 0.15% to 35,353.56, the S&P 500 lost 0.22% to 4,486.23 and the Nasdaq Composite dropped 0.15% to 15,019.20.

The U.S. dollar jumped from one-week lows after Kaplan and Bullard’s comments on bond tapering, pushing the greenback toward a key resistance level.

The dollar index, which measures the greenback against a basket of six major trading currencies, was up 0.2% in afternoon trading.

Gold prices stabilized after a sharp retreat on Thursday, taking a firmer dollar in its stride as investors looked forward to the Fed’s stance on tapering of its economic support at the Jackson Hole symposium.

Spot gold rose 0.1% to $1,792.16 per ounce. U.S. gold futures were up 0.2% at $1,794.10.

Oil fell 1% on Thursday as renewed concerns about demand due to rising COVID-19 infections cut short a three-day rally, and as Mexico restored some oil production after a fire disrupted supplies.

Brent crude was down 0.48% at $71.90 a barrel. U.S. West Texas Intermediate oil fell 0.48% to $65.03 a barrel.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chibuike Oguh in New York; editing by Jonathan Oatis)

Asian Stocks Hold Gains as Markets Await Powell Speech

MSCI’s broadest index of Asia-Pacific shares outside Japan spent most of the day near flat, but was last up 0.34%, and about 4% higher so far this week.

Australia’s market rose 0.22% and South Korea gained 0.16%, though Chinese blue chips fell 0.07%, and U.S. stock futures, the S&P 500 e-minis, were down 0.02%.

In early European trades, the pan-region Euro Stoxx 50 futures and FTSE futures were both up 0.04%

Japan’s Nikkei was also flat, but a Reuters poll of analysts and fund managers showed Japanese shares are expected to recover from their eight-month low marked on Friday to near a 30-year high by the end of this year.

“Sentiment (is) positive but vulnerable to shifts ahead of the Jackson Hole conference which features Fed Chair Powell on Friday,” said Rob Carnell, ING head of Asia research in a note.

“Part of the sentiment improvement may lie with recent thoughts that this weekend’s conference will not deliver any further insight into the timing of any Fed taper.”

This marks a change from last week, when MSCI’s Asia ex-Japan index fell to its lowest in 2021, spooked by a combination of fears about slowing growth in Asia amid outbreaks of the Delta variant of the new coronavirus, and worries the Fed might to begin shrinking its monetary stimulus sooner rather than later.

Chinese regulatory crackdowns that have roiled sectors from technology to property, also weighed on shares in Hong Kong and mainland China, dragging on the broader Asian index.

On Wednesday, the Hong Kong benchmark fell 0.16% after posting its best day in a month the day before.

The Hang Seng TECH Index, which reached its all time low last week amid worries about the regulatory crackdowns, gained 0.4%, building cautiously on this week’s strong gains as investors piled into oversold stocks.

“It’s been a fairly obvious trade to go back to neutral particularly on stocks that have been oversold,” said Rob Mumford, a Hong Kong based investment manager at GAM Investments.

“How it progresses from here, I don’t think is as much about China and Asia but what the U.S. does. If it’s a benign scenario out of Jackson Hole I think you’ll definitely see China mean revert,” he said.

On Friday, the Federal Reserve will have its annual economic symposium, traditionally held at Jackson Hole, though this year it will take place virtually due to the spread of COVID-19 in the country.

The focus remains squarely on Chair Jerome Powell’s remarks at the event for any clues regarding the timeline for Fed’s tapering of asset purchases, an issue that has buffeted financial markets in recent months.

The yield on benchmark 10-year Treasury notes was last 1.2919% little changed from their US close of U.S. close of 1.29%, having touched as much as 1.304% earlier in the session.

The dollar gained a little ground in Asian trading on Wednesday but was still not far above a one-week low versus major peers on Wednesday.

“If Powell speaks about the policy outlook and more specifically, hints at the time and/or pace of tapering, the USD could get a boost in our view,” wrote analysts at CBA in a note.

“In the meantime, the USD will remain guided by broader market mood.”

U.S. crude dipped 0.28% to $67.36 a barrel, while Brent crude fell 0.15% to $70.94 per barrel – both are up around 8% on the week, however, after posting their biggest weekly decline in more than nine months last week. [O/R]

Safe haven gold fell in tandem with the broad increase in risk appetite, with the spot price dropping 0.35% to $1,796.03 per ounce.

For a look at all of today’s economic events, check out our economic calendar.

(Editing by Shri Navaratnam and Kim Coghill)

Equities Gain, U.S. Dollar Falls; Fed Seen Less Eager to Taper

Market sentiment was buoyed after the U.S. Food and Drug Administration granted full approval to the Pfizer Inc/BioNTech SE COVID-19 vaccine. New cases, driven by the highly infectious Delta variant, have surged in parts of the United States with lower vaccination levels.

The dollar index slid. Last week it hit a nine-month high on bets that the Fed would start shifting away from its accommodative monetary policy, but that view began to change on Friday when Dallas Fed President Robert Kaplan said he might reconsider his hawkish stance if the virus harms the economy.

Now, investors are less confident Fed Chair Jerome Powell’s speech at Jackson Hole this week will indicate a timeline for winding down the Fed’s bond-buying program.

The dollar index, which measures the currency’s performance against a basket of six major currencies, fell 0.516% to 92.999.

“There was a fear that they were going to announce tapering in Jackson Hole and start in September. But it now looks that will be in 2022,” said Thomas Hayes, managing member at Great Hill Capital.

The MSCI world equity index, which tracks shares in 50 countries, rose 1.09%. Last week it had its biggest weekly fall since June. Europe’s STOXX 600 closed higher at 0.66%.

The U.S. FDA, which had given the two-dose Pfizer/BioNTech vaccine emergency-use authorization in December, went a step further based on updated data and fully approved it for people age 16 and older. The Pentagon then said it was preparing to make the vaccine mandatory for U.S. military personnel. U.S. health officials now expect more vaccine mandates from state and local governments, as well as private employers.

On Wall Street, the Dow Jones Industrial Average rose 0.61%, to 35,335.71, the S&P 500 gained 0.85%, to 4,479.53 and the Nasdaq Composite added 1.55%, to 14,942.65.

Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.46% higher, while Japan’s Nikkei rose 1.78%.

“It’s a whole combination of factors, the big one being the FDA approval of the vaccine. A lot of people are taking it as good news and then the Fed may not be as keen on tapering as suspected,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.

Oil prices rose more than 5% after seven days of declines.

Brent crude climbed $3.57, or 5.5%, to settle at $68.75 a barrel after touching its lowest since May 21 at $64.60 during the session. U.S. West Texas Intermediate (WTI) crude for October delivery rose $3.50, or 5.6%, to settle at $65.64.

Last week, both crude benchmarks marked their biggest weekly declines in more than nine months, with Brent sliding about 8% and WTI about 9%.

Gold vaulted over the key $1,800 psychological level, boosted by the weaker dollar.

Spot gold rose 1.32% at $1,804.3958 per ounce, after hitting its highest since Aug. 5.

(Reporting by Chibuike Oguh in New York; Editing by Dan Grebler and David Gregorio)