Stocks in Asia and US equity futures declined Tuesday as investors assessed whether fresh Chinese stimulus can help counter the impact of lockdowns on the economy and a selloff in Internet shares.
An MSCI Inc. gauge of Asian shares slipped as Hong Kong retreated after the government said it was unlikely to scrap hotel quarantine before July. Chinese shares fell with investment banks cutting their growth forecasts.
Nasdaq 100 futures underperformed after Snapchat owner Snap Inc. warned of deteriorating macroeconomic trends and said it’s unlikely to meet revenue and profit forecasts for the second quarter, punishing social media stocks in after-hours trading. The dollar edged higher, while Treasuries were steady.
Traders shrugged off China’s latest measures to shore up flagging growth. UBS Group AG and JPMorgan Chase & Co. downgraded their forecasts for the nation’s economic growth this year.
Equities have been volatile as investors assess the outlook for monetary policy, inflation and the impact of China’s strict Covid policies on the global economy. Minutes this week of the most recent Federal Reserve rate-setting meeting will give markets insight this week into the US central bank’s tightening path.
“That is a big risk that the Fed doesn’t get the big economy signals and keep marching along with a very aggressive tightening program,” Margaret Patel, senior portfolio manager at Allspring Global Investments, said on Bloomberg Television. “But if they look at the real world out there they will see it’s time to take a big pause and at that point we will evaluate the market and perhaps try to see to a way through without a recession.”
European Central Bank President Christine Lagarde’s prospective timetable for two quarter-point interest-rate hikes has irked colleagues who want to keep open the option of moving faster.
Kansas City Fed President Esther George said she expects the central bank to raise interest rates to 2% by August, with the further course of tightening being guided by how surging inflation cools off.
Here are some key events to watch this week:
- Eurozone S&P Global PMIs Tuesday
- US new home sales, S&P Global PMIs Tuesday
- Reserve Bank of New Zealand rate decision Wednesday
- FOMC minutes Wednesday
- ECB publishes its Financial Stability Review Wednesday
- Bank of Korea rate decision Thursday
- US GDP, initial jobless claims Thursday
- US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday
Some of the main moves in markets:
- S&P 500 futures fell 0.9% at 2:10 p.m. in Tokyo. The S&P 500 rose 1.9% Monday
- Nasdaq 100 futures fell 1.6%. The Nasdaq 100 rose 1.7% Monday
- Topix index fell 0.7%
- Australia’s S&P/ASX 200 Index was little changed
- Kospi index slipped 1.1%
- Hang Seng Index fell 1.6%
- Shanghai Composite Index fell 1.3%
- Euro Stoxx 50 futures fell 0.5%
- The Bloomberg Dollar Spot Index rose 0.1%
- The Japanese yen was at 127.60 per dollar, up 0.2%
- The offshore yuan was at 6.6739 per dollar, down 0.2%
- The euro was at $1.0665, down 0.2%
- The yield on 10-year Treasuries was at 2.84%
- Australia’s 10-year bond yield was at 3.34%
- West Texas Intermediate crude fell 0.6% to $109.65 a barrel
- Gold was at $1 855.83 an ounce