Asia Stocks Slip with U.S. futures – What to Expect
Asian stocks fell on Tuesday. The rally on Wall Street was reduced due to the retreat of U.S. stock futures, While the euro maintained a one-month high as the chances of a July rate rise from the ECB diminished. The Nasdaq futures lost 1.5% after ending more solidly on Monday; Traders blame Snap for the profit warning, which has resulted in Snapchat owner’s shares falling 28%. S&P 500 futures fell 0.9% due to Monday’s 1.8% payout. EUROSTOXX 50 futures fell 0.5%, FTSE 0.6%. MSCI’s broadest Asia-Pacific stock index fell 0.8% in trading outside Japan. The Nikkei fell 0.8%.
Markets took some comfort from U.S. President Joe Biden’s comment; That he is considering tariff cuts on China and promises to stimulate Beijing. Unfortunately, China’s zero Covid-19 policy, with the ensuing shutdown, has already caused significant economic damage. Following the disappointing data on April activity, analysts have downgraded China’s GDP forecast. The global growth forecast is only 0.6% annual in the second quarter. This is the weakest quarter since 2020, after the global financial crisis.
Early polls by European and U.S.-made buyers’ managers for Tuesday to May may show some slowdown in the resilient sector of the global economy. Japan’s manufacturing activity grew at the slowest pace in three months. Amid delivery delays in May, Toyota announced cuts in its production plans.
Asian Stocks
Analysts are also lowering U.S. growth forecasts. The Federal Reserve system seems likely to raise interest rates over the next two months. This week, the christening message should be sent to a host of Fed spokespeople. The minutes of the last policy meeting should take place on Wednesday. The European Central Bank is also more arrogant; The president was surprised when he opened the door to rate hikes as early as July.
The euro stood at $1.0665, up 1.2% overnight in the best session since early March. Now he faces a tough chart resistance around $1.0756. The U.S. dollar also retreated against sterling and various currencies; Thus, the dollar index fell 0.9% overnight. The last fraction was 102,240. Meanwhile, the euro jumped sharply to 136.05 Japanese yen. The U.S. dollar fell slightly to 127.65 yen. The decline in the U.S. dollar helped push gold back to $1,855 an ounce.
Oil prices were placed between concerns over a possible global downturn and higher fuel demand, From the U.S. summer management season and Shanghai plans to resume after a two-month coronavirus shutdown. U.S. crude fell 66 cents; The total was $109.63 per barrel. Brent lost 70 cents to $112.74.
European Shares
On Monday, the pan-European STOXX 60 index fell 0.8%, returning to a 1.3% rally. Eurozone business growth slowed this month. Raw material shortages halted production expansion, according to the Pre-Purchasing Managers Index. This has raised concerns about global growth. Early data showed that Japanese production was expanding at the slowest pace in three months.
Meanwhile, Europe’s largest economy, Germany, remains on a growth path, which has helped sustainably revitalize services. However, the demand outlook looks bleak in the face of inflation and supply problems. German stocks dropped 0.8%. Experts estimate that purchasing power is under extreme pressure due to high inflation. Inflationary pressures are barely easing, and this is a warning that it will likely remain rather rough for the European Central Bank, indicating a period of sustained pressure on stocks. All major sectors saw a sharp decline, led by utility companies.
The French index, full of luxury stocks, fell more than 1%. This is the highest decrease among regional peers. Concerns about tightening monetary policy to control rising inflation; The Russia-Ukraine conflict, and the restriction of COVID-19 in China, which limits demand in the world’s second-largest economy; Everyone endured in the markets. The European Volatility Index hit a two-year high in March. Among individual shares, the Norwegian advertising firm Adevinta grew by 4.7%, Which released higher-than-expected first-quarter earnings.
Tele2 fell 7.8% after investment company Kinnevik sold 7.2% of the telecom operator. Barclays has risen 2%. The shares of United Drax, SSE and Centrica fell from 7.9% to 16%; After reports surfaced, the British government could extend a surprise tax on electricity generators.
