More data shows US inflation slowing in October weighs on stocks worldwide
ALBAWABA – Stocks worldwide dipped on Thursday, as hopes that the United States (US) Federal Reserve (Fed) will cut US interest rates early in 2024 began to fade, as gold prices continued to rise over the last three days.
Stocks worldwide surged Tuesday through Wednesday after more data showed US inflation slowing in October. But markets quickly lost momentum as expectations of higher-for-longer US interest rates prevailed.
Meanwhile, gold prices gained 0.49 percent in the week ending Thursday, climbing $7.07 on the ounce Thursday, or 0.38 percent, according to GoldPrice.org. Spot gold is priced globally at $1,967.2 per ounce, excluding local taxes and duties, where applicable.
The US dollar also rose on Thursday, despite the fall in Treasury yields following the release of US inflation data, which put an end to the hopes for higher yields and interest rates for the time being.
Bullish markets, stocks worldwide usually exhibit inverse correspondence to gold prices and US dollar, treasuries - Shutterstock
After data released Tuesday pointed to slowing Consumer Price Index (CPI) inflation in the US, more data came in Wednesday, pointing to a further decline in US producer prices.
The US Producer Price Index showed Wednesday that wholesale prices unexpectedly fell 0.5 percent in October, marking its steepest drop since April 2020.
However, a slightly above-estimate print on retail sales growth tempered the mood, even as it marked a sharp drop from the previous month, as reported by Agence France-Presse (AFP).
As hopes for a rate cut began to recede, Treasuries rose slightly in Asia after a selloff Wednesday, according to Bloomberg, where the 10-year rate rose eight basis points, breaching the 4.5 percent threshold.
Stocks worldwide slide as hopes for US interest rate cuts recede
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was down in afternoon trade although the index is up 7.1 percent so far this month, according to Reuters.
The MSCI Asia Pacific Index slid 0.4 percent with Chinese shares in Hong Kong leading the decline after home prices fell at the fastest clip since 2015, Bloomberg reported. While US futures dropped, effectively erasing the 0.2 percent gain in the S&P 500 on Wednesday.
Japan's Nikkei stock index slid 0.18 percent as investors sold stocks to lock in profits from the previous session's sharp gains, Reuters reported.
The same goes for markets around the world as stocks worldwide fell on Thursday while investors took a break to cash in on the two-day rally ending Wednesday, according to AFP.
Stocks worldwide sometimes dip in the aftermath of a rally as investors pause to cash in on profits - Shutterstock
Hong Kong, which jumped almost four percent the day before, led the losses, shedding one percent of earlier gains, while Tokyo, Shanghai, Sydney, Wellington, Bangkok and Jakarta were also in the red.
London and Paris fell at the open, though Frankfurt edged up, while Singapore, Seoul, Taipei, Manila and Mumbai also made marginal gains, AFP reported.
Investors were hesitant to make moves on the Asian front. Although data released this week showed China's industrial and retail sectors making a comeback, a sharp drop in property investment and weak home prices suggest persistent problems in the sector.
In Europe, markets were set for a lower open, with pan-region Euro Stoxx 50 futures down 0.21 percent, German DAX futures falling 0.11 percent and FTSE futures dropping 0.11 percent.
Markets Summary and Stocks Worldwide by AFP and Bloomberg:
S&P 500 futures fell 0.1 percent as of 1:55 p.m. Tokyo time
Nasdaq 100 futures fell 0.2 percent
Japan’s Topix fell 0.2 percent
Australia’s S&P/ASX 200 fell 0.8 percent
Hong Kong’s Hang Seng fell 1.6 percent
The Shanghai Composite fell 0.6 percent
Euro Stoxx 50 futures fell 0.3 percent
Tokyo - Nikkei 225: DOWN 0.3 percent at 33,424.41 (close)
Hong Kong - Hang Seng Index: DOWN 1.4 percent at 17,832.82 (close)
Shanghai - Composite: DOWN 0.7 percent at 3,050.93 (close)
London - FTSE 100: DOWN 0.1 percent at 7,476.26
Dollar/yen: UP at 151.41 yen from 151.37 yen on Wednesday
Pound/dollar: DOWN at $1.2379 from $1.2414
Euro/dollar: DOWN at $1.0843 from $1.0850
Euro/pound: UP at 87.60 pence from 87.36 pence
