European markets opened weaker while Asian stocks retreated on Monday after Wall Street logged its worst week since Halloween.
The futures for the S&P 500 edged 0.1% lower and that for the Dow Jones Industrial Average lost 0.3%, after Congressional leaders reached an agreement on overall spending levels for the current fiscal year that could help avoid a partial government shutdown later this month.
Oil prices fell after Saudi Arabia on Sunday cut oil prices to Asian markets to their lowest level in 27 months.
Germany’s DAX gained 0.1% to 16,620.57, with data showing exports rose 3.7% in November while a feeble increase in factory orders showed the economy was still far from a solid recovery.
The CAC 40 in Paris slipped 0.1% to 7,413.53. Britain’s FTSE 100 lost 0.3% to 7,670.10.
In Asian trading, Hong Kong’s Hang Seng sank 1.9% to 16,179.00, led by losses for property and technology shares, which dropped 3.3%. The Shanghai Composite index slipped 1.4% to 2,887.54.
Property shares were heavily sold following news that major Chinese shadow bank Zhongzhi Enterprise Group, a major lender to real estate developers, filed for bankruptcy in Beijing. Meanwhile, troubled developer China Evergrande's electric vehicle company said its vice chairman had been detained on suspicion of unspecified “crimes.”
China announced sanctions Sunday against five American defense-related companies in response to U.S. arms sales to Taiwan and U.S sanctions on Chinese companies and individuals. The announcement came ahead of a presidential election in Taiwan that is centered around the self-ruled island's relationship with China, which claims it as its own territory.
In South Korea, the Kospi shed 0.4%, to 2,567.82, and Australia’s S&P/ASX 200 lost 0.5% to 7,451.50. Taiwan’s Taiex gained 0.3%, while the SET in Bangkok was 0.6% lower.
Markets in Japan were closed for a holiday.
Investors are waiting for inflation reports later this week from Japan, the U.S. and China.
Friday on Wall Street, the S&P 500 rose 0.2%, capping its first losing week in the last 10. It roared into 2024 on hopes that inflation and the overall economy are cooling enough for the Federal Reserve to cut interest rates sharply through the year.
The Dow Jones Industrial Average rose 0.1% and the Nasdaq composite also added 0.1%.
Treasury yields swung sharply in the bond market after the latest monthly jobs report showed U.S. employers unexpectedly accelerated their hiring in December. Average hourly pay for workers also rose, when economists had been forecasting a dip.
Such strong numbers are good news for workers, and they should keep the economy humming. That’s a positive for corporate profits, which are one of the main factors that set prices for stocks.
Wall Street’s worry is the strong data could also convince the Federal Reserve that inflation remains a hazard. But another report on Friday showed that growth for finance, real estate and other companies in the U.S. services industries slowed by more than economists expected last month.
Altogether, the data could bolster Wall Street's building hopes for a perfect landing for the economy, one where it slows just enough through high interest rates to stamp out high inflation but not so much that it causes a recession.
In other dealings, the yield on the 10-year Treasury was at 4.05% early Monday, up from 4.04% late Friday.
U.S. benchmark crude oil slipped 66 cents to $73.15 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 68 cents to $78.08 per barrel.
The U.S. dollar fell to 144.50 Japanese yen from 144.59 yen. The euro declined to $1.0933 from $1.0941 late Friday.
Source : Yahoo Finance / Jan 8, 2024