1 week Ago By Bloomberg News
Asian equities were primed for a muted start on Friday after US stocks fell for a fifth day, underscoring a cautious start to the year on Wall Street. Shares in Australia were fractionally higher while futures for Hong Kong stocks slipped. Nikkei futures also declined, though Japan’s equity trading is closed for a holiday.
The tentative action came after the S&P 500 and Nasdaq 100 fell 0.2% on Thursday, weighed down by lackluster results from Tesla Inc. The electronic vehicle-marker’s fourth-quarter deliveries missed estimates and annual sales dropped for the first time in over a decade.
The carmaker’s stock has now fallen 18% since Christmas. Chinese equities had been the worst performers on Thursday as data pointed to a slowing economy and traders looked ahead to potentially higher tariffs. MSCI Inc.
’s gauge of Asian shares fell for the third day out of the past four. A global gauge of emerging-market stocks fared even worse, dropping to the lowest level since September and nearing a 10% decline from a high in early October. The dollar was little changed after strengthening for a seventh session on Thursday to set a fresh two-year high, while the yen weakened against the greenback for a third day.
Australian and New Zealand government bond yields were steady, reflecting muted moves in Treasury yields in choppy trading. However, the rate on the benchmark 10-year ended Thursday nearly 20 basis points above the level prior to Jerome Powell’s hawkish turn at a Dec. 18 Federal Reserve meeting.
Big moves have proliferated across asset classes after Powell’s board expressed waning enthusiasm for interest-rate cuts. The Fed would find little to support rate cuts in economic data from Thursday. Initial applications for US unemployment fell to an eight-month low, reflecting relatively muted levels of job cuts in a labor market that has remained surprisingly resilient.
On the corporate earnings front, 2025 will be a “show-me year,” according to Lisa Shalett at Morgan Stanley Wealth Management, who warned that the dominance of the Magnificent Seven — the big technology stocks responsible for the bulk of last year’s gains — was teetering. “This idea that they as a group can trade together and lead the market may falter in 2025,” she said. As for the grim slide in the final days of 2024, it’s “too soon to call it a bad omen,” Shalett said on Bloomberg Television.
US stocks have been straining to snap a losing streak that took some shine off the S&P 500’s best two-year run dating back to the late 1990s. The index has surged more than 50% since the start of 2023, driven by gains in the tech megacaps amid enthusiasm about the boost to profits from artificial intelligence. Investors will be watching the House speaker vote Friday to see if Mike Johnson will retain his position.
Republican squabbling over his reelection could bode ill for President-elect Donald Trump’s agenda, according to Tom Essaye, founder of the Sevens report. European energy shares outperformed after a sharp increase in natural gas prices as the region braced for freezing winter temperatures without Russian supplies delivered via Ukraine. A transit contract between the two warring nations expired on New Year’s Day, with no alternative in place.
The euro fell to the weakest against the dollar in over two years reflecting concerns about European growth, US trade tariffs and monetary policy divergence with the US. Many strategists are forecasting a slide to parity with the dollar or even lower this year. Elsewhere in commodities, oil was steady after climbing Thursday on an industry report signaling US crude stockpiles continued to shrink.
A report from the American Petroleum Institute showed inventories fell by 1.4 million barrels last week, which would be a sixth straight drop. Gold was steady at around $2,657 an ounce.
Bitcoin was little changed after extending a rally Thursday. Key events this week: US ISM manufacturing, light vehicle sales, Friday Some of the main moves in markets: Stocks S&P 500 futures were little changed as of 8:53 a.m.
Tokyo time Hang Seng futures were little changed Australia’s S&P/ASX 200 was little changed Currencies The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.0267 The Japanese yen was little changed at 157.40 per dollar The offshore yuan was little changed at 7.
3405 per dollar Cryptocurrencies Bitcoin fell 0.2% to $96,887.67 Ether was little changed at $3,450.
6 Bonds The yield on 10-year Treasuries declined one basis point to 4.56% Japan’s 10-year yield declined two basis points to 1.090% Australia’s 10-year yield declined two basis points to 4.
42% Commodities West Texas Intermediate crude was unchanged at $73.13 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation..
