Stocks Fall as Traders Await Powell; Yields Steady: Markets Wrap

Publikuota: 2018-03-01
Federal Reserve Chairman Jerome Powell. Lucas Jackson („Reuters“/„Scanpix“) nuotr.
Federal Reserve Chairman Jerome Powell. Lucas Jackson („Reuters“/„Scanpix“) nuotr.
 

Asian stocks started March on a weak footing after U.S. shares tumbled in afternoon trading Wednesday. Treasuries and the dollar steadied as traders awaited a second appearance from Federal Reserve Chairman Jerome Powell, whose comments riled markets earlier this week.

Shares in Japan and Australia fell with materials and health-care stocks faring worst. Hong Kong and Chinese shares outperformed after the Caixin manufacturing gauge came in above expectations. Futures on the S&P 500 Index declined after the U.S. measure closed out its worst month in two years. 

The 10-year Treasury yield held just below 2.9 percent and German bund yields were little changed. Crude recovered slightly after plunging on an unexpectedly strong rise in inventories. The Australian dollar dropped and bonds rose after business investment unexpectedly fell in the final three months of last year, with forecast spending also lower than expected.

“February finally cracked the volatility genie out of the bottle, and now the big question is: will he stay out for good?” Ryan Detrick, senior market strategist at LPL Financial, wrote in a note to clients Wednesday. “The good news is that March kicks off two of the strongest months historically for equities, before we hit a period of seasonal weakness from May through October.”

Equities continued to fall one day after major indexes dropped based on a generally upbeat assessment of the U.S. economy from Powell. His comments left investors wondering if the central bank planned more interest rate hikes than expected in 2018. Powell testifies before the Senate Banking Committee Thursday.

Elsewhere, the U.K. pound pared a decline after the European Union published a draft Brexit treaty, with Prime Minister Theresa May squaring off for a fight. Bitcoin fell toward $10,000.

Here are some key events scheduled for this week:

Fed’s Powell testifies before the Senate Banking Committee Thursday. Other Fed speakers this week are Bill Dudley. In the euro region, investors will be watching manufacturing and jobs numbers Thursday. U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union. South Korea’s markets are closed Thursday for a holiday.

These are the main moves in markets: Stocks

The MSCI Asia Pacific Index fell 0.8 percent as of 4:37 p.m. Tokyo time. Topix index declined 1.6 percent. Hong Kong’s Hang Seng Index rose 0.1 percent. Australia’s S&P/ASX 200 Index declined 0.7 percent. Futures on the S&P 500 Index rose 0.1 percent.

Currencies

The Bloomberg Dollar Spot Index rose less than 0.05 percent. The Japanese yen fell 0.1 percent to 106.78 per dollar. The euro rose 0.1 percent to $1.2207. The Australian dollar fell 0.4 percent to 0.773 per dollar.

Bonds

The yield on 10-year Treasuries rose less than one basis point to 2.86 percent. Japan’s 10-year yield fell one basis point to 0.046 percent. Australia’s 10-year yield fell six basis points to 2.755 percent.

Commodities

West Texas Intermediate crude rose 0.2 percent to $61.74 a barrel. Gold fell 0.3 percent to $1,314.60 an ounce. LME copper rose 0.2 percent to $6,944.50 per metric ton.

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