US equity futures and Asian stocks fell Thursday on economic growth worries amid a hawkish drumbeat from central banks, pushing up the dollar as investors sought a haven from the volatility in global markets.
(Bloomberg) — US equity futures and Asian stocks fell Thursday on economic growth worries amid a hawkish drumbeat from central banks, pushing up the dollar as investors sought a haven from the volatility in global markets.
Tech firms helped send an Asian share index to a six-week low, with China’s bourses among the few to hold steady.
S&P 500 and Nasdaq 100 contracts slid, the latter in part on a tumble in chipmaker Nvidia Corp. over a sales warning.
The jitters come after the worst month since June for US shares, reflecting fears of an economic downturn alongside restrictive monetary policy to curb inflation.
The two-year Treasury yield touched 3.50% for the first time since 2007 amid a bond selloff that also buffeted Australian and New Zealand debt.
Commodity-linked and Group-of-10 currencies weakened as the dollar advanced.
The yen fell to a fresh 24-year low, heading closer to the 140 per-dollar level.
Stocks are entering a month that is often poor for returns after an August of losses across key asset classes. A bounce in global shares from June lows is fizzling as the Federal Reserve pushes back against bets on tempered rate hikes.
Global bonds, meanwhile, are sliding toward the first bear market in a generation.
The market is getting the message that the US central bank is going to fight inflation at all costs, Frances Stacy, director of strategy at Optimal Capital Advisors, said on Bloomberg Radio.
“I don’t think we’ve seen the bottom for this year,” she added.
No Cuts
Cleveland Fed President Loretta Mester reiterated the central bank needs to raise its benchmark rate above 4% by early next year.
She said she doesn’t anticipate rate cuts in 2023.
Elsewhere, oil was on the back foot, sliding to about $89 a barrel. Aggressive Fed tightening and China’s slowdown are dimming the demand outlook.
Bitcoin weakened, hovering around the closely watched $20,000 level.
The latest economic data underlined a parlous outlook for China. A private survey suggested factory activity contracted in August, sapped by power shortages and Covid-linked curbs.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept.
2
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
Will Chinese sovereign bonds outperform Treasuries? China is the theme of this week’s MLIV Pulse survey.
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Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.6% as of 11:35 a.m. in Tokyo. The S&P 500 fell 0.8%
- Nasdaq 100 futures fell 0.9%.
The Nasdaq 100 fell 0.6%
- Japan’s Topix index slid 1.2%
- South Korea’s Kospi index dropped 1.7%
- Australia’s S&P/ASX 200 Index lost 2%
- Hong Kong’s Hang Seng Index slid 1%
- China’s Shanghai Composite Index rose 0.1%
- Euro Stoxx 50 futures declined 0.9%
Currencies
- The Bloomberg Dollar Spot Index was up 0.3%
- The euro was at $1.0028, down 0.3%
- The Japanese yen was at 139.46 per dollar, down 0.4%
- The offshore yuan was at 6.9107 per dollar, down 0.1%
Bonds
- The yield on 10-year Treasuries rose one basis point to 3.20%
- Australia’s 10-year yield increased 12 basis points to 3.72%
Commodities
- West Texas Intermediate crude fell 0.1% to $89.45 a barrel
- Gold was at $1,706.31 an ounce, down 0.3%
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