Chinese stocks led Asian shares lower Wednesday amid a cautious tone in markets ahead of the Federal Reserve chief’s congressional testimony. Treasury yields and the dollar made small gains. US futures fluctuated, European contracts rose slightly and Japanese shares bucked the wider trend in Asia by eking out a small advance. The Hang Seng Index dropped about 2% as it headed for a third-straight day of losses before a holiday on Thursday in Hong Kong and the mainland. The yuan weakened past the closely watched 7.2-per-dollar level for the first time since November. Investors remain disappointed with Beijing for so far failing to issue specific support measures and banks offering only modest rate cuts. The view was also reflected in US-listed Chinese stocks, which earlier suffered their biggest decline in three months. Economic bellwether FedEx Corp. added to the mixed picture, tumbling in extended US trading after its outlook fell short of analyst consensus estimates on weakened demand. The S&P 500 notched its first back-to-back losses in nearly four weeks Tuesday as trading resumed after a long holiday weekend. Investors in US stocks are caught between fear of missing out and concerns markets have run too far, too fast as they contend with overblown valuations and hawkish signals from the Fed. Goldman Sachs Group Inc. strategists including Cormac Conners and David J Kostin said funds should consider hedging their S&P 500 exposure. Crowded bullish positioning, a narrow rally, high valuations, pricing for growth that has run past estimates and attractive alternatives to equities all add to the risks, they wrote in a June 20 note. Goldman’s base case is for the S&P 500 to climb to 4,700 in 12 months but the investment bank also sees a drop to 3,400 as possible if a recession becomes more likely. Meanwhile, bond yields fell in Asia, following the lead from US Treasuries on Tuesday. The yield on the 10-year Australian security dropped about six basis points while its Japanese equivalent fell by one basis point. Treasury yields rose fractionally on Wednesday. A gauge of dollar strength inched up after the greenback advanced against all of its Group-of-10 counterparts Tuesday except the yen. The Japanese currency weakened slightly on Wednesday. oil rose slightly as traders weighed China’s outlook and prepared for commentary from Powell. Gold was little changed after dropping 0.7% on Tuesday. Bitcoin rose as much as 3% to a six-week high on crypto initiatives involving major players from the traditional financial sector.
Nikkei +0.61% Hang Seng -1.90% CSI -0.73% Shanghai -0.52% Shenzen -1.04%
Eur$ 1.0917 CNH 7.1947 CNY 7.1915 JPY 141.74 GBP 1.2765 CHF 0.8984 RUB 84.3573 TRY 23.6241 WTI$ 71.63 +0.62% Gold 1,936 -0.04% BTC 28,755 +2.06% ETH 1,814 +1.60%
S&P -0.05% Nasdaq -0.05% EuroStoxx +0.18% FTSE +0.01% Dax +0.08% SMI
Macro :
- Goldman Sees Five Reasons for Bulls to Hedge S&P 500 Rally
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