Asian stocks

Asian stocks are down for the third day in a row

Asian stocks have declined for the third consecutive day following losses on Wall Street on Wednesday, August 2, 2023. These losses were further exacerbated by positive US job market data, fueling speculations about the Federal Reserve’s continued adherence to its tight monetary policy for a longer period.

Indices for stocks in Japan, Australia, and Hong Kong fell, while Chinese mainland stocks remained relatively unchanged. Taiwan’s market was closed due to an approaching typhoon.

Shares of “Evergrande Property Services Group Ltd,” a subsidiary of the heavily indebted “China Evergrande Group,” dropped by nearly half in Hong Kong as trading on the company’s stocks resumed for the first time since March 2022. China Evergrande Group faces financial challenges due to its heavy debt burden, and the Asian stock markets experience slowdowns in response to global economic tensions and the impact of economic and political challenges in some countries. Financial markets are susceptible to volatility, and their effects can spill over across national borders, impacting global confidence and economic outlook.

US Treasury bonds in Asia experienced a decline following yesterday’s sales, causing the 10-year bond yields to rise to their highest level since November. A report on US private sector job data, which showed companies adding 324,000 jobs last month, surpassing the 190,000 expected jobs, fueled selling activities.

Corporate revenues between contraction and increase

Earnings of companies have shown mixed trends. Bill Ackman, the founder and CEO of “Pershing Square Capital Management,” sold 30-year Treasury bonds, describing it as a peak purchase from a supply and demand perspective. “PayPal Holdings Inc” announced a contraction in its key earnings indicator for the second quarter of this year due to allocating more funds to cover delinquent loans provided to merchants. In contrast, “Shopify Inc” reported sales and earnings for the second quarter that exceeded analysts’ expectations.

Investors are closely monitoring the earnings of “Apple,” with expectations of announcing a decline in revenue for the third consecutive quarter on a year-on-year basis. “Amazon” will also discuss its quarterly results with investors and analysts, who are closely watching the performance of cloud computing businesses.

Stocks and Commodity Prices:

Stocks: S&P 500 futures were little changed as of 7:00 a.m. London time. The S&P 500 fell 1.4%, while Nasdaq 100 futures fell 0.1%, and the Nasdaq 100 dropped 2.2%. Japan’s Topix also fell by 1.5%, and Australia’s S&P/ASX 200 declined by 0.7%. On the other hand, Hong Kong’s Hang Seng rose by 0.6%, and China’s Shanghai Composite increased by 0.5%. Euro Stoxx 50 futures fell by 0.1%.

Currencies: The Bloomberg Dollar Spot Index was little changed. The euro remained stable at $1.0940, while the Japanese yen fell 0.2% to 143.54 per dollar. The offshore yuan was little changed at 7.1981 per dollar, the Australian dollar was stable at $0.6541, and the British pound was stable at $1.2708.

Bonds: The yield on 10-year Treasuries advanced five basis points to 4.13%. Japan’s 10-year yield advanced two basis points to 0.645%, and Australia’s 10-year yield advanced seven basis points to 4.10%.