Image: Reuters Berita 24 English - Asian stocks went down and the dollar went up on Thursday, as investors welcomed September by selling ev...
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| Image: Reuters |
Berita 24 English - Asian stocks went down and the dollar went up on Thursday, as investors welcomed September by selling everything that wasn't nailed down. This came after a month in which investors were worried that global policymakers would raise rates too quickly.
Following a drop in U.S. stock futures, MSCI's broadest index of Asia-Pacific shares outside of Japan fell 1.3% in early Asian trading. Futures for the S&P 500 fell by 0.6%, while futures for the Nasdaq fell by 1.1%.
The Nikkei fell 1.6%, the Hang Seng index in Hong Kong fell 1.4%, and Chinese stocks went down 0.3%.
Tech stocks went down because chip designer Nvidia Corp. fell 6.6% in after-hours trading after U.S. officials told the company to stop sending two of its best chips for artificial intelligence work to China.
Regional purchasing managers' indexes from South Korea, Japan, and China all pointed to a slowing global economy on Thursday, due to high inflation, rising interest rates, and the war in Ukraine.
In a note to clients, Rodrigo Catril, a senior FX strategist at National Australia Bank, said, "August has been a terrible month for investors in balanced funds. There have been no diversification gains from holding a portfolio of stocks and bonds."
"The end of the month brings no surprises, but rather a continuation of the major trends seen in August, with further increases in core global bond yields and weaker equities."
Both the U.S. Federal Reserve and the European Central Bank are likely to raise interest rates on loans by a lot this month.
Overnight, Loretta Mester, president of the Cleveland Fed, said that the U.S. central bank would need to raise interest rates above 4% by early next year and keep them there to bring inflation back down to the Fed's goal. She also said that the chances of a recession in the next year or two had increased.
Francois Villeroy de Galhau, a French ECB policymaker, said on Wednesday that the ECB's move on interest rates must be "orderly and predictable." This came as data showed that euro zone inflation rose to another record high last month, making the case for a 75 basis point rate hike next week even stronger.
At the end of August, U.S. stocks had their worst month in seven years. The Dow Jones Industrial Average dropped 4.06% for the month, the S&P 500 fell 4.24%, and the Nasdaq fell 4.64%.
On the currency markets, the dollar rose 0.4% against the Japanese yen to a 24-year high of 139.5 and rose 0.5% against the Australian dollar. [FRX/]
Due to expectations that the Fed will be "hawkish," Treasury yields hit new highs. The yield on benchmark two-year notes went up 6 basis points to 3.51 percent, which is the highest it has been since late 2007. The yield on 10-year bonds went up 8 basis points to 3.21 percent.
Brent crude fell 0.7% to $95 per barrel, while U.S. crude fell 0.65% to $88.97 per barrel. Wednesday, Russia stopped sending gas to Europe through the main route.
Gold went down a little bit. The spot price of gold was $1705.814 per ounce. [GOL/]
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