(Bloomberg) — Asian shares were subdued Tuesday after Apple Inc.’s plans to slow hiring highlighted concerns that aggressive monetary tightening to tackle inflation portends an economic downturn.
An Asian equity gauge dipped, hampered by a drop in technology stocks in Hong Kong and a retreat in China amid rising Covid infections and deepening turmoil in the nation’s property sector.
US futures inched up in the wake of another reversal for the S&P 500 on Monday. The index erased a 1% gain and ended lower on Apple’s intention to moderate some hiring and spending.
A dollar gauge remained near a record high and Treasuries were steady, leaving the 10-year yield below 3%. The bond market reflects expectations for a short, sharp Federal Reserve interest-rate hiking cycle that gives way to cuts next year to shore up growth.
Crude dipped but held above $100 a barrel and will likely stay there for the rest of the year, according to Iraq’s energy minister. Ether was among the leaders of a cryptocurrency rally.
Corporate updates such as Apple’s are helping markets to calibrate the risk of recession. Signs that high inflation and monetary tightening are squeezing consumers and employment could feed into worries that an equity revival since mid-June is merely brief respite in a bruising bear market.
“We’re in a period over the next couple of weeks where corporate headlines are really going to drive market activity,” Anthony Saglimbene, global market strategist at Ameriprise Financial Inc., said on Bloomberg Television. The focus is on how labor and input costs and demand are shaping the outlook, he said.
In China, officials may allow homeowners to temporarily halt mortgage payments on stalled property projects without incurring penalties. Authorities are racing to prevent a crisis of confidence in real estate from upending the world’s second-largest economy.
Meanwhile, India’s rupee tumbled to a fresh record low as foreign investors continued to pull money out from the nation’s stocks.
Overall global market volatility is a sign of the struggle “to gauge whether we are seeing, one, peak inflation and two, peak interest rates,” Lale Akoner, strategist at BNY Mellon Investment Management, said on Bloomberg Television. She expects the US dollar to remain higher for the next six months.
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Key events to watch this week:
- Earnings this week include Netflix, Tesla
- US Treasury Secretary Janet Yellen visits South Korea. Tuesday
- Reserve Bank of Australia releases July minutes. Tuesday
- UK Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey speak at event. Tuesday
- Bloomberg Crypto Summit in New York. Tuesday
- Bank of Japan, European Central Bank rate decisions. Thursday
- Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 12:52 p.m. in Tokyo. The S&P 500 fell 0.8%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 fell 0.9%
- Japan’s Topix index rose 0.5%
- South Korea’s Kospi index fell 0.4%
- Australia’s S&P/ASX 200 index lost 0.5%
- Hong Kong’s Hang Seng Index fell 1.2%
- China’s Shanghai Composite Index dipped 0.3%
- Euro Stoxx 50 futures dropped 0.8%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was at $1.0136, down 0.1%
- The Japanese yen was at 138.02 per dollar, up 0.1%
- The offshore yuan was at 6.7533 per dollar, up 0.1%
Bonds
- The yield on 10-year Treasuries fell one basis point to 2.97%
- Australia’s 10-year bond yield rose seven basis points to 3.51%
Commodities
- West Texas Intermediate crude was at $102.32 a barrel, down 0.3%
- Gold was at $1,709.42 an ounce
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