Global shares mostly slip ahead of speech by Fed's Powell
Business
Global shares mostly slip ahead of speech by Fed’s Powell
TOKYO (AP) — Global shares were mostly lower in muted trading Wednesday ahead of a speech by U.S. Federal Reserve Chair Jerome Powell that might point the way for future interest rate policy.
France’s CAC 40 slipped 0.2% to 6,971.37 and Germany’s DAX lost 0.3% to 15,108.60. Britain’s FTSE 100 edged up less than 0.1% to 7,413.84. The future for the S&P 500 was down less than 0.1% while that for the Dow industrials was unchanged.
Powell is due to address a conference in Washington, D.C., early Wednesday. Last week, investors took comments he made to suggest the Fed may finally be done with hiking interest rates this time around. Inflation has been moderating since peaking in the summer of 2022, and a recent jump in Treasury yields may be acting like a substitute for more rate hikes.
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Since then Fed officials have indicated more increases might still be needed if inflation does not abate further. The Fed’s main interest rate is now at its highest level since 2001, above 5.25%. The 10-year Treasury has fallen from above 5% to 4.60% as of early Wednesday.
Investors in Asia also are turning their attention to prospects for improved China-U.S. relations from meetings next week on the sidelines of a Pacific Rim summit.
The Asia-Pacific Economic Cooperation forum meetings in San Francisco offer an opportunity for top leaders from the U.S. and China to mend troubled trade and political ties.
Presidents Joe Biden and Xi Jinping are due to meet then, and White House officials expect to make some modest announcements as part of the tete-a-tete, but fundamental differences in the relationship will remain unchanged.
U.S. Treasury Secretary Janet Yellen is set to meet Thursday and Friday with Chinese Vice Premier He Lifeng in San Francisco before finance ministers of the APEC member nations officially kick off the summit Saturday.
Hong Kong’s Hang Seng shed 0.5% on Wednesday to 17,588.46, while the Shanghai Composite declined 0.2% to 3,052.37. Gloom over China’s worse-than-expected export data offset any positive momentum from an upgrade to its growth forecast by the International Monetary Fund. It raised its GDP growth forecast for 2023 to 5.4% from 5% but predicted that growth will slow next year.
Japan’s benchmark Nikkei 225 dropped 0.3% to finish at 32,166.48. South Korea’s Kospi lost 0.9% to 2,421.62. Australia’s S&P/ASX 200 gained 0.3% to 6,995.40.
Moody’s Investors Service affirmed the Government of Japan’s A1 long-term foreign currency and local currency issuer and local currency senior unsecured ratings. The outlook was maintained at stable.
“Today’s rating action reflects Moody’s expectation that Japan’s capacity to carry its very large debt burden remains intact, underpinned by the retention of its formidable credit strengths, including robust domestic liquidity driven by the continued growth of private sector savings,” it said.
The main worries for Japan were its “structural weaknesses,” such as its aging population, according to Moody’s.
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The weak trade data highlight persisting external challenges for Asian economic growth, Stephen Innes, managing partner at SPI Asset Management, said in a commentary.
“Despite the robust U.S. economic momentum observed in the third quarter, cyclical stocks are struggling to attract sustained interest from investors, who anticipate an eventual deceleration in economic growth,” he said.
In other trading, benchmark U.S. crude gave up 20 cents to $77.17 a barrel in electronic trading on the New York Mercantile Exchange. It dropped $3.45 to settle at $77.37 on Tuesday, and was back to where it was in July, before the latest Israel-Hamas war raised worries about potential disruptions to supplies.
Brent crude, the international standard, shed 5 cents to $81.56 a barrel.
In currency trading, the U.S. dollar edged up to 150.77 Japanese yen from 150.37 yen. The euro cost $1.0662, down from $1.0702.
