Global Markets Bracing for Volatility Ahead of US Jobs Data
Asian equities are poised to decline, following a lackluster performance by US tech stocks, which sent the S&P 500 tumbling 1.9% and the Nasdaq 100 down 2.4% on Thursday. The disappointing results from tech giants, including Microsoft Corp and Meta Platforms Inc, have sparked investor unease.
Tech Sector Under Pressure
Apple Inc. shares fell slightly in post-market trading after reporting weaker-than-anticipated sales in China. However, Amazon.com Inc. and Intel Corp. bucked the trend, rising in after-hours trade on optimistic outlooks. According to Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, “It makes sense to trim some from those names that have worked so well over the past 12-18 months and look for AI laggards as well as other tech themes like cybersecurity, robotics, and automation.”
Treasuries Rally Ahead of US Jobs Data
A rally in Treasuries favored the long end of the curve ahead of US jobs data due later Friday. Despite gains for US government debt on Thursday, October remains the worst month for Treasuries in two years, reflecting a rethink on US interest rates given signs of resilience in the economy. The lower Treasury yields on Thursday weakened an index of dollar strength.
US Jobless Claims Fall, Boosting Employment Market
Weekly US jobless claims fell more than expected, indicating a robust employment market, and less reason for the Federal Reserve to cut rates. Friday’s nonfarm payroll figures are expected to show 100,000 jobs added to the US economy in October.
Asia-Pacific Markets in Focus
In Asia, the yen was steady Friday after climbing as much as 1% against the greenback Thursday, following comments from Bank of Japan Governor Kazuo Ueda that currency markets have had a major impact on the economy, pointing to another potential rate hike in coming months. China’s residential property sales rose in October, the first on-year increase of 2024, after authorities unleashed their strongest package of measures to boost the sector.
Data Releases and Key Events
Data set for release in Asia Friday includes China Caixin manufacturing PMI, Indonesian inflation, and Hong Kong retail sales. The Fed’s preferred measure of underlying US inflation posted its biggest monthly gain since April, bolstering the case for a slower pace of interest-rate cuts. Key events this week include China Caixin manufacturing PMI, US employment, and ISM manufacturing.
Commodities and Currencies
Oil surged on a report Iran is planning a fresh attack on Israel, while gold retreated as some investors booked profit after the metal’s rally to a fresh record. The Bloomberg Dollar Spot Index fell 0.2%, and the euro was little changed at $1.0883. The Japanese yen was little changed at 152.10 per dollar, and the offshore yuan was little changed at 7.1228 per dollar. The Australian dollar was little changed at $0.6581.
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