Asian stocks and U.S. futures fell Tuesday as investors mulled the latest batch of headlines on global growth and trade, while Treasury yields pushed lower and the yen higher.
Without any direction offered from American markets that were shut for a holiday Monday, shares declined from Tokyo to Sydney to Shanghai to Seoul. European futures also pointed lower. News that the IMF was cutting its global growth forecast to the weakest in three years merely cemented an already downbeat mood. The offshore yuan weakened after President Xi Jinping stressed the need to maintain political stability in an unusual meeting that suggested fresh concerns about the implications of the slowing economy.
Investors find themselves caught between a stellar start to the year and increasingly hazy prospects for global growth and trade. Optimism on U.S-China talks has faded somewhat, after a Bloomberg report that the two sides are making little progress on the key issue of intellectual property protection.
“The appetite for risk is exceptionally low,” Ajay Kapur, head of Asia-Pacific and global emerging market strategy at Bank of America Merrill Lynch, told Bloomberg Television. “Most of the time, when you buy when sentiment is this depressed, you tend to make money,” unless there’s a recession, he said. “If you’re confident there will be no recession in the next year or so, I think this is a good indicator.”
Elsewhere, the pound pared gains after U.K. Prime Minister Theresa May declined to rule out a delay to the March 29 Brexit departure date and the main opposition Labour party called for a vote that could pave the way to a second referendum. Oil retreated from a two-month high in New York.
These are some events investors will be watching out for in the coming days:
Earnings season is in full swing: Johnson & Johnson, IBM, UBS, United Technologies, Texas Instruments, and Ford are among companies posting results this week.The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opens in Davos, Switzerland on Tuesday.There are monetary-policy decisions for the Bank of Japan (Wednesday), the Bank of Korea and the European Central Bank (both Thursday).
And these are the main moves in markets:
The MSCI Asia Pacific Index slid 0.7 percent as of 3:35 p.m. in TokyoJapan’s Topix Index decreased 0.6 percent.Hang Seng Index dropped 1.2 percent.S&P/ASX 200 fell 0.5 percent.The Shanghai Composite Index fell 1.4 percent.Futures on the S&P 500 Index sank 0.8 percent.
The Bloomberg Dollar Spot Index climbed 0.1 percent.The euro climbed slipped 0.1 percent to $1.1358.The British pound decreased 0.1 percent to $1.2877.The Japanese yen increased 0.2 percent to 109.44 per dollar.The offshore yuan slipped 0.2 percent to 6.8154 per dollar.
Ten-year Treasury yields dipped 3 basis points to 2.75 percent.Australian 10-year bond yields fell one basis point to 2.30 percent.
West Texas Intermediate crude fell 1 percent to $53.29 a barrel.Gold rose 0.3 percent to $1,279.80 an ounce.