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Asian markets fall behind rough US GDP data



ASSOCIATED PRESS



a large tall building in a city: Mount Fuji is seen behind the Tokyo skyline.


© Bloomberg News
Mount Fuji is seen behind the Tokyo skyline.

Asian shares fell on Friday as reports showed U.S. workers’ layoffs are persisting at high levels after the U.S. economy crashed at a rate of nearly 33% annually in spring, the worst quarter on record.

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Profit reports, a measure of how well businesses are handling the departure from the coronavirus pandemic, added to the complaint. Some technology companies have slowed the trend and are showing positive results. But many companies are hurting.

Japan’s Nikkei 225 (JP: NIK) fell 2.3% while Hong Kong’s Hang Seng index (HK: HSI) rose 0.2%. Shanghai Composite (CN: SHCOMP) was about flat while the smallest cap of Shenzhen Composite (CN: 399106) gained 0.3%. Kospi of South Korea (KR: 180721) fell 0.2%, Taiwan’s Taiex (TW: Y9999) fell 0.3%, and Australia’s S & P / ASX 200 (AU: XJO) fell 1.6%. Markets in Singapore, Malaysia and Indonesia were closed for the holidays.

August tends to be a bad month for stocks, noted Stephen Innes of AxiTrader Corp.

“Stock markets are looking extraordinarily corrective to the point that we may enter a pullback phase as we enter August, mostly called the summer market,” Innes said in a commentary.

On one positive sign, China reported its manufacturing activity in July and in July export orders strengthened despite weak American and European demand. Friday’s monthly survey was another sign of the world’s second-largest economy gradually recovering from the coronavirus pandemic.

Central Bank meetings for various countries are on the agenda for next week.

“Indonesia’s and Philippines’ second-quarter GDP will also draw scrutiny, highlighting the impact of the pandemic, ”said Bernard Aw, chief economist for IHS Markit in Singapore.

The Japanese government said late Thursday that the nation’s economy is likely to drop 4.5% for the fiscal year ended March 2021. It predicts a return to growth in the next fiscal year.

Among the Japanese companies that reported earnings next week are Sony Corp (JP: 6758), Honda Motor Co. (JP: 7267), Toyota Motor Corp. (JP: 7203) and Nintendo Co. (JP: 7203).

Some companies are holding better than others.

Japanese media reports said Toyota was about to become the world’s number one producer again and surpassed Volkswagen, now the top producer in global vehicle sales. Toyota sales were already recovering in markets such as China, which is recovering from its early outbreak of COVID-19, according to the company.

Overnight, the United States reported the contracted economy at a record rate of 32.9% sharply in April-June as pandemic closures grew.

News of the sharp and sharp collapse came as a resurgence of outbreaks forced businesses in many areas to close for the second time. The government’s estimate of the second quarter of the fall in gross domestic product has no comparison since records began in 1947. The worst previous quarterly contraction – by 10%, less than a third of what was reported on Thursday – occurred in 1958 during the Eisenhower administration.

The bad news came as no big surprise, and on Wall Street, the S&P 500 (SPX) fell 0.4% to 3.246.22. Nearly three out of four stocks in the index declined. Among the hardest hit were oil producers, banks and other companies most in need of the economy to escape the recession.

The Dow Jones Industrial Average (DJIA) lost 0.9% to 26.313.65.

Stocks appeared set to fall much earlier in the day but stronger-than-expected profits reported by UPS and other companies helped the market reduce its losses. So did the stable prices for Amazon and other large technology-oriented stocks, which reported their own results after the day’s trading ended.

The anticipation of their reports, which proved to be even better than expected from Wall Street, helped the Nasdaq composite (COMP) completely erase its early losses and rise 0.4% to 10.587.81.

But overall, earnings reports were well below levels a year ago, before the pandemic hit. Big companies in the S&P 500 are on track to report a nearly 38% drop for the second quarter of the year before, according to FactSet.

Shortly after trading ended for the day, Amazon (AMZN), Apple (AAPL), Facebook (FB) and parent company Google Alphabet (GOOGL) (GOOG) all reported higher profits for the last quarter of what Wall Street was predicted. Investors have continued to play with them expecting them to succeed as the pandemic accelerates a shift towards online trading.

The U.S. crude benchmark (CLU20) gained 14 cents to $ 40.06 a barrel in e-commerce on the New York Mercantile Exchange. Crude Brent (UK: BRNU20), the international standard, rose 37 cents to $ 43.31 a barrel.

The dollar (USDJPY) fell to 104.22 Japanese yen from 104.73 yen.

Video: S&P wiped out over earnings, data, stimulus and election worries (Reuters)


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