Contrasting Dynamics

Asian shares slid Friday as investors evaluated the latest raft of corporate earnings, including those from tech stocks, which had a poor day on Wall Street and weighed on overall investor sentiment.

KEEPING SCORE: Japan’s benchmark Nikkei 225 index sank 0.4 percent to 19,994.54 and South Korea’s Kospi slumped 1.2 percent to 2,414.08. Hong Kong’s Hang Seng lost 0.5 percent to 26,995.76 while the Shanghai Composite index in mainland China dipped 0.1 percent to 3,245.77. Australia’s S&P/ASX 200 tumbled 1.3 percent to 5,709.70. Benchmarks in Southeast Asia were mixed.

EARNINGS SEASON: A swoon in technology stocks on Wall Street was setting the tone for trading in markets more broadly. Twitter plunged 14 percent after it reported no growth in users while Amazon fell 1 percent as profit missed expectations. Investors were also assessing other earnings reports, including by Japanese automaker Nissan Motor Co., which reported trading quarterly profit dipped 1 percent on rising costs and slowing growth in China.

ECONOMIC OUTLOOK: Orders for long-lasting U.S. factory goods posted their biggest gain in nearly three years last month. The uptick in orders are a good sign for the U.S. economy, though the figures aren’t as impressive as they first appear because most of the increase comes from a big jump in aircraft orders, which are typically volatile. Looking ahead, markets are expecting the estimate of U.S. second-quarter GDP growth later Friday followed by the latest China and U.S. monthly purchasing managers’ indexes and a U.S. jobs report, all of which the Fed will take into account when deciding on interest rates.

MARKET VIEW: “We’re just in one of those patches where there’s a lot of conflicting signals coming through the markets and we’re stuck in the cross currents,” said Stephen Innes, senior trader at OANDA. “People are really having a tough time coming to grips and obviously the data points are going to be the key pivot points” for market sentiment, he added.

The Washington Post

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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