clearn.png
Friday January 27th, 2023 6:44PM

Asian markets open lower after price data slam Wall Street

By The Associated Press
Related Articles
  Contact Editor

Asian markets skidded lower on Wednesday after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy.

Tokyo’s benchmark Nikkei 225 lost 2.8% in early trading Wednesday, to 27,816.58, while Sydney's S&P/ASX 200 declined 2.5% to 6,834.80. In Seoul, the Kospi lost 2.6% to 2,386.29.

U.S. futures edged higher, with the contracts for the Dow industrials and the S&P 500 up 0.1%. European futures also declined.

On Tuesday, the Dow lost more than 1,250 points and the S&P 500 sank 4.3%. Tuesday's hotter-than-expected report on inflation has traders bracing for the Federal Reserve to raise interest rates still more, adding to risks for the economy.

The steep sell-off didn’t quite knock out the market’s gains over the past four days, but it ended a four-day winning streak for the major U.S. indexes and erased an early rally in European markets.

The S&P 500 sank 4.3% to 3,932.69. The Dow fell 3.9% to 31,104.97 and the Nasdaq composite closed 5.2% lower, at 11,633.57.

Bond prices also fell sharply, sending their yields higher, after a report showed inflation decelerated only to 8.3% in August, instead of the 8.1% economists expected.

The yield on the two-year Treasury, which tends to track expectations for Fed actions, soared to 3.74% from 3.57% late Monday. The 10-year yield, which helps dictate where mortgages and rates for other loans are heading, rose to 3.42% from 3.36%.

The hotter-than-expected reading has traders bracing for the Federal Reserve to ultimately raise interest rates more than expected to combat inflation, with all the risks for the economy that entails.

“Right now, it’s not the journey that’s a worry so much as the destination,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “If the Fed wants to hike and hold, the big question is at what level.

All but six of the stocks in the S&P 500 fell. Technology and other high-growth companies fell more than the rest of the market because they’re seen as most at risk from higher rates.

Most of Wall Street came into the day thinking the Fed would hike its key short-term rate by a hefty three-quarters of a percentage point at its meeting next week. But the hope was that inflation was falling back to more normal levels after peaking in June at 9.1%.

Such a slowdown might let the Fed reduce the size of its rate hikes through the end of this year and then potentially hold steady through early 2023.

Tuesday’s report dashed some of those hopes. Many of the data points were worse than economists expected, including some the Fed pays particular attention to, such as inflation outside of food and energy prices.

Markets honed in on a 0.6% rise in such prices during August from July, double what economists expected, said Gargi Chaudhuri, head of investment strategy at iShares.

Traders now see a one-in-three chance the Fed will hike the benchmark rate by a full percentage point next week, quadruple the usual move. No one in the futures market was predicting such a hike a day earlier.

The Fed has already raised its benchmark interest rate four times this year, with the last two increases by three-quarters of a percentage point. The federal funds rate is currently in a range of 2.25% to 2.50%.

Higher rates hurt the economy by making it more expensive to buy a house, a car or anything else bought on credit. Mortgage rates have already hit their highest level since 2008, creating pain for the housing industry. The hope is that the Fed can pull off the tightrope walk of slowing the economy enough to snuff out high inflation, but not so much that it creates a painful recession.

Tuesday's data casts doubt on hopes for such a “soft landing.” Higher rates also hurt prices for stocks, bonds and other investments.

Investments seen as the most expensive or the riskiest are the ones hardest hit by higher rates. Bitcoin tumbled 9.4%.

Expectations for a more aggressive Fed also helped the dollar add to its already strong gains for this year. The dollar has been surging against other currencies in large part because the Fed has been hiking rates faster and by bigger margins than many other central banks.

The dollar bought 144.59 Japanese yen, up from 144.57 yen late Tuesday. The euro rose to 0.9973 cents, up from 0.9969 cents.

Oil prices rose. U.S. benchmark crude added 38 cents to $87.69 per barrel in electronic trading on the New York Mercantile Exchange. It lost 47 cents to $87.31 on Tuesday. Brent crude, the international pricing standard, climbed 38 cents to $93.55 per barrel.

___

AP Business Writers Stan Choe, Alex Veiga and Damian J. Troise contributed.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services, AP Business - Utilities
© Copyright 2023 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Warnock, Walker set on 1 debate in Georgia Senate race
Georgia voters will see at least one fall debate between Sen. Raphael Warnock and Republican challenger Herschel Walker
9:00PM ( 3 minutes ago )
Asian markets open lower after price data slam Wall Street
Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy
8:54PM ( 9 minutes ago )
School to start Wednesday in Seattle after weeklong strike
School will begin Wednesday in Seattle following a weeklong teachers strike that delayed the start of classes
8:51PM ( 12 minutes ago )
Associated Press (AP)
West Virginia lawmakers OK abortion ban with few exceptions
West Virginia’s Legislature has passed a sweeping abortion ban with few exceptions
8:00PM ( 1 hour ago )
Official jailed in Vegas reporter killing had 2020 arrest
An elected official accused of killing a Las Vegas investigative journalist in what authorities allege was retaliation for articles critical of him and his office faced court sanctions two years ago for resisting arrest in a domestic violence case
7:44PM ( 1 hour ago )
Jury gets R. Kelly's child pornography and trial-fixing case
Jurors have begun deliberating in R. Kelly’s federal trial in Chicago on charges accusing him of making child pornography and rigging his 2008 child porn trial
7:29PM ( 1 hour ago )
AP National News
Midterm primaries wrap up with fresh test of GOP's future
A staunchly conservative, retired Army general is favored to win New Hampshire’s Republican Senate nomination and face potentially vulnerable Democratic Sen. Maggie Hassan
4:30PM ( 4 hours ago )
In 2nd Jones trial, FBI agent at Sandy Hook breaks down
An FBI agent struggled to control his emotions as he described on the witness stand seeing bodies inside Sandy Hook elementary school -- a scene that the conspiracy theorist Alex Jones later claimed was staged by actors
4:29PM ( 4 hours ago )
Markets shudder on dashed inflation hopes; Dow down 1,000
Markets are shuddering following Wall Street’s sudden realization that inflation isn’t slowing as much as hoped
3:19PM ( 5 hours ago )
AP Online National News
Emmys reach record-low audience of 5.9 million people
The Emmy Awards reached a record-low audience of 5.9 million people on NBC Monday night
8:05PM ( 59 minutes ago )
Businesses, White House plan for possible rail strike Friday
Business and government officials are bracing for the possibility of a nationwide rail strike at the end of this week while talks carry on between the largest U.S. freight railroads and their unions
7:09PM ( 1 hour ago )
Amazon Prime ready to kick off 'Thursday Night Football'
Thursday night’s game between the Los Angeles Chargers and Kansas City Chiefs on Prime Video kicks off an 11-year agreement between Amazon and the NFL and marks the first time the league has sold a package of games to a streaming service
6:23PM ( 2 hours ago )
AP Business
Stocks tumble on dashed inflation hopes; S&P 500 loses 3%
Stocks are tumbling, and disappointment is smacking markets worldwide, following Wall Street’s sudden realization that inflation isn’t slowing as much as hoped
1:03PM ( 8 hours ago )
At 50, TV's ‘The Waltons’ still stirs fans’ love, nostalgia
“The Waltons,” one of TV's most popular and enduring programs, turns 50 on Wednesday
11:52AM ( 9 hours ago )
Stocks tumble after inflation stays hotter than expected
Stocks are tumbling and disappointment is hitting markets worldwide, following Wall Street’s sudden realization that inflation isn’t slowing as much as hoped
10:43AM ( 10 hours ago )
AP Business - Economy
Asian stocks gain ahead of US inflation report
Asian stocks have followed Wall Street higher ahead of data traders hope will show surging U.S. inflation eased in August, reducing pressure for more interest rate hikes
2:32AM ( 18 hours ago )
Goddess gowns, Old Hollywood glam and pink rule Emmy carpet
Hannah Waddingham paired her Dolce & Gabbana goddess gown with bedazzled high top sneakers, and Elle Fanning went Old Hollywood glam at the Emmys on Monday
11:26PM ( 21 hours ago )
Goddess gowns, Old Hollywood glam and red rule Emmy carpet
Hannah Waddingham paired her Dolce & Gabbana goddess gown with bedazzled high top sneakers, and Elle Fanning went Old Hollywood glam at the Emmys on Monday
9:40PM ( 23 hours ago )
AP Business - Financial Markets
German man convicted of murder after killing over mask rules
A German man has been convicted of murder and given a life sentence for fatally shooting a young gas station clerk following a dispute over face masks
9:01AM ( 12 hours ago )
As data centers proliferate, neighbors knock the noise
Northern Virginia has established itself as the world's largest home for data centers
8:53AM ( 12 hours ago )
Dubai court rejects Danish extradition request for financier
An Emirati court has ruled that a British man suspected of masterminding a $1.7 billion tax scheme cannot be extradited to Denmark to face charges
9:40PM ( 23 hours ago )
AP Business - Industries
US markets point higher ahead of a week of inflation data
Wall Street is pointed toward gains before the opening bell, building on last week’s strong finish as investors await more inflation data this week
8:11AM ( 1 day ago )
World shares advance after Wall Street's end of week rally
Shares have climbed in Europe and Asia after last week's strong close on Wall Street, the first weekly gain in four weeks
4:21AM ( 1 day ago )
Asian shares rise on back of Wall Street rally
Shares have climbed in Asia after last week's strong close on Wall Street, the first weekly gain in four weeks
2:23AM ( 1 day ago )
AP Business - Financial Services
Official: Idaho computer chip plant makes US more resilient
Energy Secretary Jennifer Granholm says a $15 billion investment in a new semiconductor plant by Boise, Idaho-based chipmaker Micron in its hometown is a step in protecting the United States from the vulnerabilities of a globalized market made clear by the COVID-19 pandemic and the war in Ukraine
5:53PM ( 1 day ago )
US invites Mexico to join semiconductor production effort
A high-level United States delegation invited Mexico to participate in a push to shift semiconductor production from Asia to North America and expand production of electric vehicles
5:23PM ( 1 day ago )
Putin's Russia struggles for response to Ukrainian blitz
Ukraine's counteroffensive in the northeastern part of the country seemed to catch Russia by surprise in the nearly 7-month-old war
4:33PM ( 1 day ago )
AP Business - Utilities
School to start Wednesday in Seattle after weeklong strike
School will begin Wednesday in Seattle following a weeklong teachers strike that delayed the start of classes
8:51PM ( 13 minutes ago )
Ashley Kalus wins GOP primary for Rhode Island governor
A businessperson seeking office for the first time, Ashley Kalus, has won the Republican primary for Rhode Island governor, defeating a rival who has served time in state prison
8:47PM ( 17 minutes ago )
Pope, opening Kazakh visit, blasts 'senseless' Ukraine war
Pope Francis has begged for an end to Russia’s “senseless and tragic war” in Ukraine as he arrived in the former Soviet republic of Kazakhstan
8:45PM ( 19 minutes ago )
Ken Starr, whose probe led to Clinton impeachment, dies
Ken Starr, a former federal appellate judge and a prominent attorney whose criminal investigation of Bill Clinton led to the president’s impeachment, died Tuesday at age 76, his family says
8:40PM ( 24 minutes ago )
Casket of Queen Elizabeth II arrives at Buckingham Palace
The coffin of Queen Elizabeth II has returned to Buckingham Palace, moving through a drizzly London as crowds lined the route for a glimpse of the hearse and to bid her farewell
8:38PM ( 26 minutes ago )