US stocks mostly up as holiday shopping season begins

NEW YORK -- Wall Street stocks mostly climbed to end a shortened trading day on Friday, with investors keeping close watch on consumer spending at the unofficial start of the year-end shopping season.

The Dow Jones Industrial Average rose 0.3 percent to 35,390.15.

The broad-based S&P 500 edged up 0.1 percent to 4,559.34, while the tech-heavy Nasdaq Composite Index ticked down 0.1 percent to 14,250.85.

Markets closed early on "Black Friday," the Friday after the Thanksgiving holiday when retailers often offer major discounts.

The annual sales day, which is followed by the newer "Cyber Monday," marks the start of the holiday shopping season.

"Today's lack of movement can be ascribed to a general lack of trading interest befitting the day after Thanksgiving," said Briefing.com in a note.

Consumers are expected to be increasingly price-conscious this year, still jaded by stubborn inflation and lingering effects from the upheaval of the pandemic.

But "how that ends up impacting retailers' profits remains to be seen" for now, Briefing.com added.

Among major retailers, Walmart shares advanced 0.7 percent while Target was up 0.5 percent.

Amazon shares were flat after it was hit by strikes in Europe, as workers demand better wages and working conditions.

UNI Global Union warned Amazon would face strikes and protests in more than 30 countries around the world, including the United States.

Agence France-Presse

Stock markets rise as US inflation data, ECB rate loom

NEW YORK -- Global markets rose on Monday at the start of a busy week that includes the release of key US inflation data and a European Central Bank decision on interest rates.

Wall Street pushed higher, with traders already focused on Wednesday's consumer price index (CPI) report, which could determine the Federal Reserve's next move on interest rates.

"Today's generally quiet session means that attention is focusing squarely on the US CPI data and ECB decision due this week," said Chris Beauchamp, chief market analyst at online trading platform IG.

"With the risk that both could deliver nasty surprises, risk appetite has been limited," he added.

Investors have worried that the Fed's rate-hike campaign to combat high inflation could tip the world's biggest economy into a severe recession.

But US Treasury Secretary Janet Yellen said Sunday she was optimistic that the economy was on course for a soft landing.

"I am feeling very good about that prediction," she said. "I think you'd have to say we're on a path that looks exactly like that."

She added: "Every measure of inflation is on the road down."

The Paris and Frankfurt stock exchanges closed higher even though the European Commission cut its 2023 growth outlook for the eurozone, from 1.1 percent to 0.8 percent.

The data will give the ECB more food for thought when it meets Thursday to decide whether to continue or pause its own rate hikes.

The commission said the higher borrowing costs had an impact on the eurozone economy.

"The new forecasts won't come as a major surprise and may even prove overly optimistic over time but they do come days ahead of the next ECB meeting and could tempt some policymakers into voting to pause the tightening cycle," said Craig Erlam, senior market analyst at the OANDA trading platform.

"Weaker economic readings will probably drive a lively debate and they obviously won't suggest, if they do hike, that it's job done," he added.

Elsewhere, London also rose while Tokyo and Hong Kong finished lower.

After a slow start, Asian traders turned more positive through the day and tracked last week's gains on Wall Street, with data showing a pick-up in Chinese inflation lifting sentiment.

Traders took heart from news that China's consumer price index rebounded in August, having contracted the month before.

While the 0.1 percent rise was less than expected, it gave traders some hope that the economy is slowly on the mend after a painful 2023 so far.

On currency markets, the yen picked up after sinking last week to a 10-month low against the dollar, with support coming from comments seen as hawkish by Bank of Japan boss Kazuo Ueda.

He told the Yomiuri newspaper that policymakers would have a better idea later in the year about wage rises, a key data point for rate decisions.

The yen has tumbled around 10 percent owing to the BoJ's refusal to move away from its ultra-loose monetary policy while the Fed pushed borrowing costs to a two-decade high.

The yuan also bounced back from a 16-year low against the dollar after the People's Bank of China said it would crack down on speculation that distorts the value of the currency after months of volatility.

In energy markets, gas prices rallied as strikes continued at Chevron plants in Australia.

Agence France-Presse

Global stocks finish mixed to cap lackluster August

NEW YORK -- Global indexes mostly dipped on Thursday, capping off a lackluster month of growth for markets around the world.

European stocks mostly slipped, as did major Asian markets with the exception of Japan's Nikkei 225 index, which rose on renewed confidence in manufacturing stocks after auto giant Toyota posted strong earnings results.

Wall Street stumbled to end Thursday's session, with the Dow and S&P 500 both falling as traders digested the latest inflation numbers and looked ahead to jobs data that could prove crucial to future interest rate decisions.

A small rally on Thursday failed to save the Nasdaq from seeing its worst month of the year, while the pan-European Euro Stoxx 50 also saw a disappointing month overall.

Both the US Federal Reserve and the European Central Bank have adopted a more data-dependent approach on whether to increase interest rates further.

That made the latest inflation data all the more important ahead of the next monetary policy meetings due in September.

The Fed's preferred measure of inflation, the personal consumption expenditures (PCE) price index, rose to a 3.3 percent annual increase in July, up from 3.0 percent in June.

Thursday's data was "probably widely viewed as just fine," Craig Erlam of the OANDA trading platform told AFP.

"It's good enough for now but there's still a lot of improvement needed over the coming months," he added, before the Fed can begin relaxing monetary policy.

Sticky inflation

Across the Atlantic, stocks in Frankfurt rose while those in Paris fell after data showed the annual rate of inflation in the eurozone remained unchanged in August at 5.3 percent. This came as a smaller drop in energy prices balanced out a rise in food and drinks costs.

Analysts said the data increased the chance of the European Central Bank deciding against a further interest rate hike next month. That in turn weighed on the euro.

"With unemployment starting to show signs of increasing across the bloc, markets are starting to price an increased probability of a pause in the ECB's rate hiking cycle when the governing council next meets on September 14th," said analyst Michael Hewson at CMC Markets.

In Asia, China revealed that factory activity shrank again this month while services weakened, which will likely pile further pressure on authorities to press ahead with measures to kickstart the sputtering economy.

Officials have announced a series of pledges to help various sectors -- particularly the property industry -- and there is an expectation that more is on the way.

In the latest measure, local reports Thursday said the central bank is drawing up policies that will make it easier for private firms, including developers, to access funding.

But analysts say more wide-ranging government spending will be required to appease nervous investors.

Fresh data showing the country's manufacturing sector contracted for a fifth straight month in August only added to the arguments for more help.

On the corporate front, shares in UBS jumped six percent after the bank giant said it would fully absorb the Swiss unit of its recently-swallowed rival Credit Suisse.

Agence France-Presse

Global stock markets mixed as rally fades

NEW YORK -- Stock markets diverged Wednesday as a global rally faded, despite more data that soothed fears of a further rise in US interest rates.

Wall Street closed higher as private sector hiring data came in softer than expected, while second quarter GDP growth was revised down to 2.1 percent on an annual measure.

The latest figures and other weaker numbers revealed on Tuesday "appear to be adding weight" to the idea of a pause in rate hikes by the US Federal Reserve next month, said CMC Markets UK analyst Michael Hewson.

This adds to "further downward pressure on yields," he said. Lower yields on bonds tend to boost stocks as they signify lower borrowing costs for companies.

Fed chief Jerome Powell said last week the US central bank stands ready to hike interest rates further, having already pushed them to a 22-year high to tame prices, if data shows the US economy continues to grow strongly and price pressures persist.

But the Fed's data-dependent approach is also seen as keeping the possibility open that interest rates may not go any higher if the world's largest economy cools.

That set off strong gains at the beginning of the week, particularly after Tuesday's report on US job openings, which was softer than anticipated. Analysts said it would give monetary policymakers room to hold off on lifting borrowing costs again.

"Signs of America's cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

But with stocks having posted solid gains in recent days, the rally may be running out of steam.

"We suspect traders might be showing some hesitation, thinking that this heady action can't persist or, at least, opting to wait and see if it does," said analyst Patrick O'Hare at Briefing.com.

On Wednesday, the Dow closed 0.1 percent higher while the S&P 500 rose 0.4 percent.

Investors may also be showing caution as more data is due later this week, including the Fed's preferred gauge of inflation -- the personal consumption expenditures price index -- as well as US government payrolls data.

"Today's data was never likely to be overly impactful with tomorrow's inflation, income, and spending figures, prior to Friday's payrolls, always the primary focus," said analyst Craig Erlam of OANDA.

"That could well set the tone for September ahead of some major central bank meetings," he added in a note.

In Europe, London stocks rose while Frankfurt and Paris fell. Tokyo closed higher, but Shanghai and Hong Kong flattened.

Focus was also on China after a report said its biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country's beleaguered property sector.

And after Asian markets closed, China's embattled real estate giant Country Garden reported losses of approximately $6.7 billion for the first half of this year while warning of possible default.

The company's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.

Agence France-Presse

Global dividends hit record $568 bn in second quarter

PARIS, France -- Dividends paid by the world's biggest listed companies soared to a record $568.1 billion in the second quarter, with payouts to shareholders expected to grow further despite economic uncertainty, a study showed Wednesday.

Payments by the 1,200 biggest public companies rose more than expected, increasing by 4.9 percent compared to the same April-to-June period last year, according to the report by asset management firm Janus Henderson.

Banks accounted for half of the world's dividend growth as their margins were boosted by interest rate hikes, the report said.

Automakers represented one-seventh of the increase.

Firms in Europe, excluding Britain, led the pack with payouts rising by 9.7 percent to $184.5 billion. North American companies paid out $165.3 billion, a 4.2 percent increase.

Swiss food giant Nestle was the world's biggest dividend payer, followed by British bank HSBC and German automaker Mercedes-Benz.

Ben Lofthouse, head of global equity income at Janus Henderson, said global economic growth is "moderating" as interest rates increase.

"Markets now expect global profits to be flat this year, after soaring to record highs in 2022, and when we speak to companies around the world, they are now more cautious about the outlook," Lofthouse said.

Central banks have hiked rates as they battle high inflation. Lenders have responded by increasing their own rates, boosting their profits.

While a weaker economy is usually bad for banks, their rising margins are driving dividend payouts, Lofthouse said.

However, he added, "we do expect dividend growth to continue."

Agence France-Presse

US, European stocks push higher as inflation eases

NEW YORK -- Wall Street rebounded Friday and eurozone stocks edged higher on data showing easing inflation, while the yen yo-yoed after Japan's central bank tweaked its ultra-loose monetary policy.

The Dow added 0.5 percent, while the broader S&P 500 climbed 1.0 percent and the tech-heavy Nasdaq Composite Index jumped 1.9 percent.

This came after data showed that the Federal Reserve's preferred gauge of inflation, the personal consumption expenditures price index, rose 3.0 percent last month from June 2022.

The figure was down from a 3.8 percent rise in May, extending a downward trend.

The indicator is still above the central bank's two percent target over the longer run, "yet the Fed is bound to take some solace from the recognition that it continues to move in the right direction," said Briefing.com analyst Patrick O'Hare.

Stock markets have enjoyed a broadly positive week on hopes the US Fed and other central banks were at or close to the end of more than a year of monetary tightening as inflation comes down.

The Fed on Wednesday said that future rate decisions would be determined by data, which was welcomed by investors who saw recent indicators -- pointing to an easing of price pressure and softening of the labor market -- as giving it room to hold off more increases.

And on Thursday, European Central Bank boss Christine Lagarde left open the possibility of a pause in rate hikes.

Paris stocks edged 0.2 percent higher on Friday after data showed the French economy grew a forecast-busting 0.5 percent in the second quarter, while inflation eased in July.

Frankfurt added 0.4 percent, setting another record close, on slowing inflation despite data showing the German economy stagnated in the second quarter.

"With price pressures in Germany also slowing more than expected in July there is a sense that this week's rate hike by the ECB may well have been its last, with a number of ECB policymakers expressing increasing caution over the growth outlook," said analyst Michael Hewson at CMC Markets.

After a closely-watched meeting, the Bank of Japan (BoJ) said it would allow "greater flexibility" in government bond markets, having allowed them to move in a tight band in a process known as yields curve control.

But on Friday it said that while it would maintain that range, its upper and lower limits would be used as references, rather than being rigid.

The move means rates in Japan would be allowed to rise more than previously. The yen swung around after the announcement, but was lower against both the dollar and the euro near 2100 GMT.

The currency has been hammered for more than a year as the BoJ refused to shift from its loose policy, even as central banks around the world pushed up interest rates to fight surging inflation.

However, with prices picking up at home and the yen struggling, pressure has been growing on the bank to change tack.

The Nikkei 225 index sank more than two percent on the prospect of higher borrowing costs before paring the losses by the close.

"Market reaction has been very choppy as it is not a straightforward decision to digest," said Khoon Goh, of Australia and New Zealand Banking Group.

Asian markets closed out the week mixed. Hong Kong and Shanghai were boosted by hopes for further measures by Beijing to boost the struggling Chinese economy.

- Key figures around 2050 GMT -

New York - Dow: UP 0.5 percent at 35,459.29 (close)

New York - S&P 500: UP 1.0 percent at 4,582.23 (close)

New York - Nasdaq: UP 1.9 percent at 14,316.66 (close)

London - FTSE 100: FLAT at 7,694.27 (close)

Frankfurt - DAX: UP 0.4 percent at 16,469.75 (close)

Paris - CAC 40: UP 0.2 percent at 7,476.47 (close)

EURO STOXX 50: UP 0.4 percent at 4,466.50 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 32,759.23 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 19,916.56 (close)

Shanghai - Composite: UP 1.8 percent at 3,275.93 (close)

Dollar/yen: UP at 141.17 yen from 139.48 yen on Thursday

Euro/dollar: UP at $1.1020 from $1.0979

Pound/dollar: UP at $1.2851 from $1.2796

Euro/pound: DOWN at 85.72 from 85.80 pence

West Texas Intermediate: UP 0.6 percent at $80.58 per barrel

Brent North Sea crude: UP 0.9 percent at $84.99 per barrel

Agence France-Presse

Senior Fed official backs July interest rate hike

WASHINGTON -- A senior US Federal Reserve official said Thursday he supported another interest rate hike later this month, and backed a second hike before the end of the year to keep tackling inflation.

After 10 consecutive increases, the Fed in June chose not to hike its benchmark lending rate, saying policymakers would use the time to assess the impact of raised rates on the US economy.

According to meeting notes released later, most members of the Fed's rate-setting Federal Open Market Committee (FOMC) indicated they expect two additional hikes will be needed this year to help keep inflation on a downward trajectory.

On Thursday evening, Fed governor and FOMC member Christopher Waller indicated he was one of them.

"I see two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target," he told an audience in New York, according to prepared remarks.

Waller said he had backed last month's pause due to "lingering doubts about when or if an abrupt tightening of credit conditions would occur," following banking stresses in March.

"I felt that waiting another six weeks was prudent risk management," he added.

Waller said data published since June has made him more confident that the banking crisis will not lead to "significant" problems for the American economy.

"I see no reason why the first of those two hikes should not occur at our meeting later this month," he added.

Waller's remarks come a day after the Fed published a report indicating that "overall economic activity increased slightly since late May."

Futures traders assign a probability of more than 90 percent that the Fed will raise its benchmark lending rate by another quarter percentage-point on July 25-26.

This would bring its key lending rate to its highest level in more than two decades.

Agence France-Presse

Stock markets jump as US inflation cools

NEW YORK -- Stock markets bounced on Wednesday as data showed US inflation cooled more than expected in June, raising hopes that the Federal Reserve will soon end its cycle of interest rate hikes.

The dollar fell against other major currencies while oil prices jumped, with the international benchmark, Brent North Sea crude, breaching the $80-per-barrel mark.

The Fed and other central banks have been raising borrowing costs in efforts to bring down consumer prices, which jumped as countries emerged from the Covid-19 pandemic and soared further following Russia's invasion of Ukraine last year.

Official data on Wednesday showed the US consumer price index (CPI) rose 3.0 percent from a year ago last month, down from 4.0 percent in May, coming in slightly lower than analysts expected.

While Fed officials have signaled that further rate increases are likely needed to bring inflation back to their two percent target, the June CPI report heightens market doubts about the number of additional increases needed down the line.

The Fed paused its aggressive monetary tightening at its last gathering in June but Chair Jerome Powell has warned that two more hikes were probably needed by the end of the year.

Futures markets still expect a Fed rate hike in July, but not in September.

"The Fed is extremely likely to raise interest rates by another 25 basis points but there's a good chance that it could now be the last," Craig Erlam, analyst at trading platform OANDA, told AFP.

"We're seeing progress across the board at this point, albeit more slowly than many will have hoped, but there's no longer a necessity for the Fed to be so aggressive," Erlam said.

CMC Markets analyst Michael Hewson said that the latest data make clear that "further rate hikes beyond July will be a big ask, and probably won't happen, hence today's US dollar weakness."

Nevertheless, Fed officials would likely continue to adopt a hawkish tone, he said, in order to keep market expectations in line.

Dollar sags

Wall Street stocks spent the entire session in positive territory, with the S&P 500 winning 0.7 percent, while European markets extended earlier gains following the US inflation data.

London equities had already climbed after the Bank of England announced that all major UK retail lenders passed stress tests to assess their resilience to economic shocks.

The pound rose above $1.30 for the first time since April 2022 while the euro also advanced to multi-month highs.

Higher interest rates make a currency attractive to investors looking for higher returns.

Asian equities have meanwhile enjoyed a broadly positive week so far after China signaled a long-running crackdown on the tech sector was nearing an end, while officials also pledged help for ailing real estate developers.

That was followed by reports of further growth-boosting measures and data showing new loans in China had picked up in June thanks to a central bank interest rate cut.

Optimism is now building for more announcements aimed at kickstarting the world's number two economy as its post-Covid recovery sputters.

Agence France-Presse

Geopolitical fragmentation could cut global GDP by 2 percent: IMF

WASHINGTON - Growing geopolitical fragmentation around the world, including the US-China trade war and the Russian invasion of Ukraine, could cut global output by two percent over the long run, the International Monetary Fund said.

Research by the IMF found that growing geopolitical tensions were causing a reallocation of foreign direct investment (FDI) away from countries that were geographically close and towards those that were geopolitically close, like the United States and Europe.

This reallocation of FDI has the potential to cause serious damage to emerging market economies, the IMF said, since they are more reliant on inflows of investment from more geopolitically distant countries.

"In general, a fragmented world is likely to be a poorer one," IMF officials wrote in a blog post published Wednesday to accompany the research.

Policymakers "should carefully balance the strategic motivations behind reshoring and friend-shoring against economic costs to their own economies and the spillovers to others," the IMF officials wrote, adding that it was "crucial" to try and foster greater global integration.

The IMF also published research on Wednesday outlining the impact to the banking sector of geopolitical fragmentation, highlighting the cost to Russia and its allies of the 2022 invasion of Ukraine.

"Cross-border banking and portfolio debt flows to Russia and its allies (countries that rejected the motion in the United Nations in March 2022 to condemn Russia’s war on Ukraine) have reversed sharply, with allocations falling by about 20 and 60 percent relative to prewar levels, respectively," IMF officials wrote in a blog post.

The report found that rising tensions between investing and recipient countries like the United States and China had reduced the overall bilateral cross-border allocation of portfolio investment and bank claims by around 15 percent.

Agence France-Presse

Asian markets mixed but little joy as traders eye more Fed hikes

HONG KONG - Markets were mixed Thursday, with little buying enthusiasm after minutes from a Federal Reserve policy meeting indicated interest rates will likely keep rising longer than previously feared.

A blockbuster jobs report and sticky inflation data this month have dealt a hammer blow to earlier expectations the US central bank could soon pause its monetary tightening campaign or even cut borrowing costs before year's end.

Several Fed officials have lined up to warn traders they were too optimistic and that with the labour market still strong, rates would need to keep rising until it had weakened and prices were under control.

Minutes from the Fed's February 1 decision reinforced that broad agreement as policymakers try to get inflation down to their target of two percent.

"Participants observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to two percent, which was likely to take some time," the minutes said.

"Almost all participants agreed that it was appropriate to raise the target rate for the federal funds rate 25 basis points at this meeting."

And it noted that "a few participants" were in favour of a 50-point increase.

Analysts pointed out that the minutes came before the latest jobs and inflation figures.

National Australia Bank's Taylor Nugent, meanwhile, noted "the absence of any mention of 'disinflation' in the minutes, which contrasts (bank boss Jerome) Powell's press conference where he noted many times that the disinflationary process was underway".

After a healthy rally through January, global markets have rowed back this month as investors come to terms with the higher-for-longer rates narrative and recession fears return.

After Wednesday's sell-off, Asian markets were mixed.

Hong Kong, Shanghai, Sydney, Singapore, Mumbai Bangkok and Manila all fell, though Seoul, Wellington, Taipei and Jakarta edged up.

London dipped at the open, though Frankfurt and Paris edged higher.

"One of our big concerns coming into this year was the market was anticipating an event that wasn't likely to occur, that being a dovish Fed pivot," Oaktree Capital Management's Danielle Poli told Bloomberg Television.

"The market has woken back up a little bit in these last two weeks."

Investors are now awaiting the release of US jobless claims later in the day, which could provide a fresh idea about the strength of the labour market.

Crude prices edged up slightly Thursday but made only a small dent in the losses of at least three percent suffered the day before as the prospect of higher rates and a possible recession drags on demand expectations.

Agence France-Presse

Asian markets up on recovery hopes, yen sinks after BoJ decision

HONG KONG - Asian markets rose Wednesday to maintain their strong start to the year, with Tokyo soaring and the yen tumbling after the Bank of Japan decided against further tweaking monetary policy.

Weak earnings from banking titan Goldman Sachs, a jobs warning by Microsoft, and a plunge in manufacturing data highlighted the bumpy road ahead for the United States, the world's top economy, even as optimism over inflation and the interest rate outlook improved.

Still, hopes for China's recovery continued to provide much-needed support, with Vice Premier Liu He telling the Davos forum that growth will likely rebound this year as the country reopens from zero-Covid while adding that Covid infections had peaked.

His comments came after data showed the economy expanded last year at its slowest pace since 1976 -- excluding pandemic-hit 2020 -- but beat forecasts.

The news added to hopes for a global recovery after last year's pain caused by rising prices, rate hikes, China's economic woes, a spike in energy costs and the war in Ukraine.

"Last fall, there was broad consensus that China was in the wrong place, Europe was slipping into a recession, and the Fed was ultimately caught 'wrong-footed' by very sticky inflation," said SPI Asset Management's Stephen Innes.

"But fast-forward to these early weeks of January, and China's reopening has put the country on a path to much better growth, investors are far more optimistic about Europe's recovery, and the bane of all ills US inflation is even starting to recede."

Hong Kong, Shanghai, Sydney, Singapore, Wellington, Manila, Bangkok, Mumbai and Jakarta were all on the rise, though Seoul dipped.

Tokyo was the standout, however, piling on more than two percent after the Bank of Japan left its key policy rate unchanged.

But the yen tumbled from around 128.50 per dollar to more than 131 Wednesday after the move. It also tumbled against the euro and sterling.

Traders had been keenly anticipating the decision, which came after the BoJ last month shocked markets by announcing a tweak that allowed its tightly controlled bond yields to move in a wider bracket.

Clifford Bennett, chief economist at ACY Securities, said the decision indicated the BoJ was "acting appropriately in what is still an uncertain economic growth path, and still low inflation levels".

While other central banks have hiked rates, "Japan has long been a different story and remains so", he added in a note.

The move in December sent the yen soaring, and while the bank held firm Wednesday, there is a growing expectation that officials will eventually move away from the policy of buying up bonds to keep yields in check.

"Speculation will remain that it will eventually review its policy," said Takahide Kiuchi, executive economist at Nomura Research Institute and a former BoJ policy board member.

"Market focus will now shift to the appointment of a new governor," he told AFP, noting that the bank needs to "make its policy flexible" whoever is appointed.

However, other observers said if the BoJ continued to stick to its position, the Japanese unit could fall back to around 135 per dollar.

The strategy has been in place for years as the BoJ has attempted to boost the stuttering economy by keeping borrowing costs low, but with other central banks hiking rates, the yen came under immense pressure and hit a three-decade low of around 152 per dollar in October.

Key figures around 0520 GMT 

Tokyo - Nikkei 225: UP 2.5 percent at 26,790.52

Hong Kong - Hang Seng Index: UP 0.2 percent at 21,616.17

Shanghai - Composite: UP 0.1 percent at 3,228.60

Dollar/yen: UP at 131.40 yen from 128.13 yen on Tuesday

Euro/dollar: DOWN at $1.0772 from $1.0794 

Pound/dollar: DOWN at $1.2283 from $1.2285

Euro/pound: DOWN at 87.70 pence from 87.85 pence

West Texas Intermediate: UP 0.9 percent at $80.89 a barrel

Brent North Sea crude: UP 0.8 percent at $86.58 a barrel

New York - Dow: DOWN 1.1 percent at 33,910.85 (close)

London - FTSE 100: DOWN 0.1 percent at 7,851.03 (close)

Agence France-Presse

Tokyo stocks end lower on stronger yen

Tokyo stocks ended lower Monday, with exporters hit hard by a stronger yen and investors cautious ahead of a Bank of Japan meeting.

The benchmark Nikkei 225 index was down 1.14 percent, or 297.20 points, to end at 25,822.32, while the broader Topix index lost 0.88 percent, or 16.77 points, to 1,886.31.

The dollar fetched 127.64 yen, against 127.87 yen Friday in New York, firmer than the 129.11 seen in Asia’s Friday trade.

The yen has appreciated rapidly on signs the US Federal Reserve will slow its rate hikes and the Bank of Japan’s decision last month to pivot away from its long-standing ultra-loose monetary policy.

The Japanese central bank said it would loosen its grip on yields and allow those on certain government bonds to move in a wider band.

“Speculation over BoJ policy has helped strengthen the yen, exacerbating fears about worsening profitability, which prompted sell-offs among the export sector including automakers and manufacturers”, IwaiCosmo Securities said in a note.

The BoJ will hold a two-day meeting later this week, with traders speculating on whether it could further tweak its policy.

At the moment, “there are many investors uncomfortable with buying shares, even cheap ones, before seeing the result of the BoJ meeting,” Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.

Among major shares in Tokyo, SoftBank Group lost 1.31 percent to 5,846 yen, Sony Group slid 1.00 percent to 10,855 yen, and Uniqlo operator Fast Retailing plunged 1.95 percent to 72,050 yen.

Meanwhile, Toyota edged up 0.11 percent to 1,817.5 yen.

Agence France-Presse 

Google's money churning ad engine sputters in rough economy

SAN FRANCISCO, United States - Google parent Alphabet reported quarterly earnings that fell short of market expectations as belts tightened in the digital ad market that drives its revenue.

Alphabet said it made a profit of $14 billion in the third quarter on ad revenue that grew just 6 percent to $69 billion when compared with the same period of last year.

Aside from one period at the start of the Covid pandemic, that would mark the weakest revenue growth at Alphabet for any quarter since 2014.

"When Google stumbles, it's a bad omen for digital advertising at large," said Insider Intelligence analyst Evelyn Mitchell.

"This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate."

Alphabet shares slipped 6.8 percent to $97.35 in after-market trades that followed the release of the earnings report.

Google's foundation in advertising on its heavily used search engine does give it an advantage, however, over other ad-reliant tech firms such as Meta, Snap and Twitter, the analyst added.

"Over time, we've had periods of extraordinary growth and then there are periods I viewed as a moment where you take the time to optimize the company to make sure we are set up for the next decade of growth ahead," Alphabet and Google chief Sundar Pichai said on an earnings call.

"I view this as one of those moments."

Alphabet chief financial officer Ruth Porat said the financial results in the quarter showed "healthy fundamental growth in Search and momentum in Cloud" computing revenue, but suffered from foreign exchange rates given the strong US dollar.

"We're working to realign resources to fuel our highest growth priorities," Porat said.

Big tech firms are grappling with multiple challenges, from inflation to the war in Ukraine, putting pressure on earnings.

Alphabet recruited throughout the pandemic, but announced a slowdown in hiring as ad revenue growth cooled this year.

"Within this slower headcount growth next year we will continue hiring for critical roles, particularly focused on top engineering and technical talent," Porat said.

Many other tech companies have decided to lay off staff, including Netflix and Twitter, or slow the pace of hiring, such as Microsoft and Snap. 

YouTube squeeze? 

Worsening the financial situation for Alphabet is the fact that Google tends not to aggressively promote advertising on its platform with tactics such as trying to convince businesses that online marketing is a smart move during tough economic times, said independent tech analyst Rob Enderle of Enderle Group.

"They don't like the idea of making their money off advertising, so they don't treat the market very well," Enderle contended.

"Now, you are seeing the adverse impact of not taking your revenue source seriously."

The earnings report also showed that ad revenue at YouTube was slightly lower than it was in the same quarter a year earlier, despite a hot trend of people watching video on-demand on the internet.

"Overall, I feel YouTube remains in a really good position to continue to benefit from the streaming boom," chief business officer Philipp Schindler said during an earnings call.

However, Alphabet noticed a "pullback in spending" by advertisers at YouTube in the quarter, Schindler told analysts.

"They have a ton of competition in video, and TikTok is probably hitting YouTube pretty hard," Enderle said.

Netflix last week reported that it gained subscribers in the recent quarter, calming investor fears that the streaming giant was losing paying customers.

The company said it ended the third quarter with slightly more than 223 million subscribers worldwide, up some 2.4 million, after seeing subscriber ranks ebb during the first half of the year.

The turn-around in subscriber growth comes as Netflix is poised to debut a subscription option subsidized by ads in November across a dozen countries.

Rival streaming platform Disney+ is to launch ad-subsidized subscriptions in December.

Agence France-Presse

Stocks drop and dollar rises as inflation, rate fears return

HONG KONG - Equities tumbled Thursday, tracking a sell-off on Wall Street, while the dollar jumped further as surging inflation, interest rate hikes and recession fears returned to the fore.

Traders in Europe were keeping tabs on Westminster a day after Prime Minister Liz Truss's government was plunged into a fresh crisis and facing collapse following the resignation of home secretary Suella Braverman.

That came days after the sacking of finance minister Kwasi Kwarteng and has left Truss's premiership on a knife-edge.

The positive start to the week, helped by forecast-beating earnings and a major UK government policy U-turn, gave way to the downbeat mood that has characterized markets all year as traders contemplated an extended period of uncertainty.

News that UK inflation bounced back above 10 percent in September highlighted the struggle central banks have in bringing prices down, despite lifting borrowing costs in recent months.

That followed a similarly glum reading out of New Zealand earlier in the week and helped push up government bond yields around the world, indicating higher interest rates.

The unease on trading floors, and concerns that prices are showing no sign of easing, also sent investors back into the safety of the dollar, adding more inflationary pressure outside the United States and dragging on stock markets.

"As is often the case, rising US yields and the strong US dollar are the sledgehammers pounding global equities lower," said SPI Asset Management's Stephen Innes. 

After Wall Street's drop, markets across Asia were deep in the red, with selling also fuelled by concerns about the Chinese economy as Covid cases spike in the country and leaders stick to lockdown strategies.

A decision to delay the release of third-quarter growth data this week added to the unease among investors.

Hong Kong led losses, shedding almost three percent at one point, while Tokyo, Sydney, Seoul, Wellington, Taipei, Shanghai, Mumbai and Manila were also in the red.

There was a brief rally in the afternoon sparked by a report that China was considering easing quarantine rules for people coming into the country, though traders were unable to maintain momentum.

London's FTSE 100 fell in the morning. Frankfurt was also down but Paris edged up.

The losses wiped out most of the gains enjoyed at the start of the week, even as positive earnings reports came in from Netflix and top Wall Street banks, with Ellen Hazen of F.L.Putnam Investment Management warning worse could be yet to come.

"As we look at third-quarter results, we think there are going to be more misses than the market is currently expecting," she told Bloomberg Radio.

"If you look at GDP for this year, it keeps getting revised downward and it's really hard for companies to keep growing their earnings in the face of that."

On forex markets the dollar briefly broke to as high as 150.08 yen for the first time since 1990, putting pressure on Japanese authorities who said saying they were keeping a close watch on the market and were ready to step in to support the beleaguered currency.

But analysts warned the yen would continue to slide as long as the Bank of Japan refuses to tighten monetary policy at the same time as the Federal Reserve presses on with its sharp rate hikes.

The pound was also back under pressure, having bounced Monday after Britain's new finance minister Jeremy Hunt reversed virtually all of Truss's debt-fuelled, tax-cutting mini-budget that hammered financial markets.

Sterling was hovering just above $1.12 -- against more than $1.14 Tuesday -- owing to the chaos in Westminster, with many of the prime minister's own party calling for her to stand down, while there is speculation that more members of the cabinet could walk.

Oil prices extended Wednesday's rally that came in reaction to a drop in US petroleum stockpiles, and despite President Joe Biden's decision to release 15 million barrels from US strategic reserves.

The crude was the last batch to be released from the 180 barrels pledged by Biden earlier this year, aimed at bringing costs down.

But Innes added: "Markets will mostly ignore further releases from the Strategic Petroleum Reserves -- prices are elevated because of the medium- and longer-term gap between supply and demand resulting from years of oil industry swoon and the resulting low capital expenditure.

"So, the impact of additional... releases will likely have diminishing returns with (reserves) at a multi-decade low."

Key figures around 0810 GMT 

Tokyo - Nikkei 225: DOWN 0.9 percent at 27,006.96 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 16,280.22 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,035.05 (close)

London - FTSE 100: DOWN 0.2 percent at 6,914.36

Pound/dollar: DOWN at $1.1210 from $1.1219 on Wednesday

Dollar/yen: UP at 149.90 yen from 149.88 yen

Euro/dollar: UP at $0.9794 from $0.9778 

Euro/pound: UP at 87.18 pence from 87.10 pence

West Texas Intermediate: UP 1.5 percent at $86.86 per barrel

Brent North Sea crude: UP 1.2 percent at $93.52 per barrel

New York - Dow: DOWN 0.3 percent at 30,423.81 (close)

Agence France-Presse

Markets sink as US jobs data fan rate hike bets

HONG KONG - Stock markets sank Monday as forecast-beating US jobs data fanned expectations for another big Federal Reserve interest rate hike, while traders are now focusing on an upcoming inflation report.

A brief rally across trading floors last week gave way to gloom as investors grow increasingly worried that central bank efforts to tame runaway prices will plunge the global economy into recession.

Adding to the stress is the upcoming corporate earnings season, which many fear will show that companies are feeling the pain of tightening monetary policies, and fresh China-US tensions.

All three main indexes tumbled Friday -- with the Nasdaq off almost four percent -- following news that a net 263,000 US jobs were created in September.

While that was down from August it was more than expected and showed that the labor market remained robust and highlighted the tough job Fed officials face in their battle against four-decade-high inflation. 

With the spotlight on a consumer price index reading later in the week, policymakers continue to take a hawkish tone, warning they will not ease up on their rate hikes even if that means causing a recession.

Asia tracked the US losses, with Hong Kong down three percent and hefty selling in Sydney, Singapore, Mumbai, Bangkok, Manila, Jakarta and Wellington. 

Shanghai dropped as traders returned from a week-long holiday, with rising Covid numbers in the country leading to worries of more economically painful lockdowns ahead of a key Communist Party gathering.

Chinese tech firms were also hit after Washington on Friday announced new export controls aimed at restricting China's ability to buy and make high-end chips with military applications, adding to tensions between the countries.

London, Paris and Frankfurt all fell in the morning, while Moscow stocks plunged nearly 12 percent following a series of strikes on cities across Ukraine and after the bridge connecting Crimea to Russia was hit by an explosion at the weekend.

Tokyo, Seoul and Taipei were closed.

"The sell-off in equities and the rally in the dollar following Friday's US employment report reflects the concern that the hurdle for a Fed pause is high," said SPI Asset Management's Stephen Innes.

"The rising unemployment rate needed to help bring down CPI inflation will require job losses despite the political fallout that is bound to ensue. Regardless, tightening monetary policy until job losses materialize is on the cards."

He added that there was also nervousness about earnings.

"Unlike June, where earnings were poised to beat expectations, investors are biased towards hitting the sell button as concern around lagged effects of tightening hitting bottom lines now permeate expectations," he said in a note.

The prospect of higher US borrowing costs sent the dollar rallying Friday and it held most of those gains in early Asian trade.

Investors are keeping an eye on the yen, which is edging back to the lows touched last month when the government stepped in with a massive cash injection to support the currency.

The pound weakened even as the Bank of England said it was launching a temporary facility aimed at easing liquidity pressures that arose after the UK government's budget shocked markets last month.

It said it was ready to increase the size of its UK government bond purchases under an emergency measure due to end Friday.

The pound has been hammered -- at one point hitting a record low versus the dollar -- since finance minister Kwasi Kwarteng unveiled a debt-fuelled tax-cutting mini-budget.

Oil prices edged down after seeing their biggest weekly gain since March in reaction to a decision by OPEC and other major producers led by Russia to cut output by two million barrels a day.

The drop Monday came on demand concerns caused by China's Covid flare-ups and more weak data out of Beijing caused by recent lockdowns.

"A slew of weak macroeconomic data that China has released shows that there is very limited room for an economic rebound in the short term, which is hard to provide support for earnings and market confidence," Shen Meng, at investment bank Chanson & Co in Beijing, said.

Key figures around 0810 GMT 

Hong Kong - Hang Seng Index: DOWN 3.0 percent at 17,216.66 (close) 

Shanghai - Composite: DOWN 1.7 percent at 2,974.15 (close)

Tokyo - Nikkei 225: Closed for a holiday

London - FTSE 100: DOWN 0.7 percent at 6,944.90

Pound/dollar: UP at $1.1074 from $1.1082 on Friday

Euro/dollar: DOWN at $0.9703 from $0.9743

Euro/pound: DOWN at 87.62 pence from 87.97 pence

Dollar/yen: DOWN at 145.35 yen from 145.38 yen

West Texas Intermediate: DOWN 0.4 percent at $92.27 per barrel

Brent North Sea crude: DOWN 0.5 percent at $97.44 per barrel

New York - Dow: DOWN 2.1 percent at 29,296.79 (close)

-- Bloomberg News contributed to this story --

Agence France-Presse

New Zealand hikes interest rates to seven-year high

WELLINGTON - New Zealand's central bank on Wednesday delivered its eighth consecutive interest rate hike, sending the country's borrowing costs to their highest level in more than seven years, as it joins a global battle against surging inflation.

The Reserve Bank of New Zealand stayed true to its course of the past 18 months, unveiling another 50 basis point increase in its key rate to 3.5 percent -- a level not seen since May 2015 -- and warned of more rises in a bid to stymie price rises.

The move came as its counterparts in the United States, Europe and elsewhere ramp up rates to curtail decades-high inflation, fuelling concerns they could trigger a prolonged global downturn.

The central bank warned inflation could climb beyond the current 7.3 percent rate, which is already a 32-year high.

Wednesday's announcement came on the same day New Zealand's government unveiled a better financial position than expected in its accounts to the end of June.

A rise in tax revenue and slower growth in spending resulted in a deficit of NZ$9.7 billion (US$5.6 billion), considerably less than the forecast deficit of NZ$19 billion.

Agence France-Presse

Germany faces recession as energy crisis bites: think-tank

FRANKFURT, Germany - Germany will fall into recession next year, a leading think-tank warned Monday, with Europe's biggest economy facing soaring inflation as Russia slashes energy supplies.

The Ifo institute expects the German economy to shrink 0.3 percent in 2023 -- slashing its forecast by four percentage points from a previous prediction in June.

Inflation is expected to hit 8.1 percent this year and 9.3 percent next year, it said. 

"We are heading into a winter recession," said Timo Wollmershaeuser, Ifo's head of forecasts.

"The cuts in gas supplies from Russia over the summer and the drastic price increases they triggered are wreaking havoc on the economic recovery following the coronavirus."

Real household incomes and purchasing power will drop sharply, the think-tank warned.

There is likely to be a "return to normal" in 2024 with 1.8 percent growth and 2.5 percent inflation, Wollmershaeuser said. 

At the start of September, Russian energy giant Gazprom halted gas deliveries to Europe via the key Nord Stream 1 pipeline saying it would be under repair for an unspecified period. 

The shutdown accentuates an energy crisis in Germany, long reliant on Russian gas, and across Europe, with Moscow accused of using energy as a weapon amid tensions over the Ukraine war.

German inflation hit 7.9 percent in August, and earlier this month the government unveiled a new multi-billion-euro relief package to help households cope with soaring prices.

Last week, the European Central Bank hiked interest rates by a record 75 basis points as its seeks to battle sky-high inflation across the eurozone and said more increases were to come. 

Agence France-Presse

JPMorgan Chase reports lower profits, gives cautious economic outlook

NEW YORK, United States - JPMorgan Chase reported a drop in second-quarter profits and warned that a weakening global economic outlook prompted the firm to set aside additional funds to cover potential bad loans.

Executives sketched out a complex economic picture, with US households still relatively well off in terms of savings, a strong job market and robust consumer spending.

But headwinds -- including high inflation, geopolitical uncertainty and fast-changing Federal Reserve policy to sharply curtail liquidity and raise interest rates -- "are very likely to have negative consequences on the global economy sometime down the road," said Chief Executive Jamie Dimon in a statement.

While consumers are "in very good shape," there are "a serious set of issues" that threaten the outlook, Dimon told reporters on a conference call.

These include the worry that Russia will cut off Germany's natural gas supply and the possibility the Federal Reserve's aggressive plan may not be sufficient to rein in inflation.

"The markets will be volatile," Dimon predicted. "You can't have all these kind of things going on and not have volatile markets."

Global equities have been under pressure throughout 2022 as economists increasingly highlight rising recession risks, although some believe any downturn would be relatively mild.

The big US bank posted earnings of $8.6 billion for the second quarter, down 28 percent from the same three months of last year, in results that missed analyst expectations.

Revenues were $30.7 billion, up one percent.

The bank said it added $428 million in credit reserves due to a "modest deterioration in the economic outlook." In the year-ago period, JPMorgan's profits were boosted by a $3 billion release in reserves.

Dimon said even in the case of a recession, JPMorgan would need to hold "a lot less" in reserves compared with the $15 billion it set aside early in Covid-19. 

The bank experienced $657 million in charge-offs for bad loans in the second quarter, up only modestly from the level in the previous quarter.

JPMorgan enjoyed a boost from higher net interest income following Fed interest rate increases. But the bank also incurred higher expenses on salaries, technology and marketing.

The bank temporarily suspended share buybacks to meet new federal stress test requirements for managing risk assets, Dimon said.

Consumers still spending 

The results came as the Labor Department this week reported another large spike in wholesale and consumer prices, which are the heart of investor fears about the consumer-driven US economy.

But JPMorgan Chief Financial Officer Jeremy Barnum said "there's essentially no evidence" at this point of a drop-off in consumption.

The bank's credit card data confirms that consumers are spending more on food and gasoline, but that they are still also spending on travel and dining.

"That indicates to us that consumers still don't feel so pinched by inflation that they're cutting back on discretionary spending, and that's a relatively positive sign," Barnum said.

Persistently high inflation has also raised fears that the Fed will adopt an even tougher line on monetary policy after the central bank announced a 0.75-percentage-point hike, its biggest since 1994.

The latest inflation readings have prompted talk of a potential for full point rate increase at the policy meeting later this month -- one that Fed Governor Christopher Waller said Thursday he could support if coming data show no signs of a slowdown.

Dimon said there is evidence of the hit from the Fed shift, but the impacts could worsen if the US central bank is unable to slow the economy with a "soft landing," Dimon said.

JPMorgan shares finished down 3.5 percent to $108.00.

The suspension of share buybacks is "spooking" investors, said Briefing.com, calling it "a signal that management feels the need to be cautious with its money."

Agence France-Presse

New Zealand to boost electric car sales

WELLINGTON — New Zealanders who trade in their gas-guzzling car will get financial aid towards buying a cleaner alternative, in one of a raft of climate change initiatives announced by Jacinda Ardern's government Monday.

The country's first Emissions Reduction Plan, costing nearly 3 billion NZ dollars (1.88 billion US dollars), outlined spending for the next 4 years to help meet its goal of cutting carbon dioxide emissions to net-zero by 2050.

A "scrap and replace" pilot scheme will initially give 2,500 low-income families financial support towards an electric or hybrid vehicle if they replace their petrol- or diesel-powered car.

Transport Minister Michael Wood said the scheme's details were yet to be finalized but he envisaged it would expand rapidly to include "tens of thousands" of New Zealanders.

He said the government's ultimate goal was for less reliance on all cars by 2035 by getting people to switch to public transport or other alternatives.

The government also allocated 650 million NZ dollars to help cut fossil fuel use in the industrial sector over the next 4 years.

There will also be an investment in developing agricultural technology -- regarded as critical in an economy heavily reliant on farming exports.

Conservationists noted the timing of the investment, coming on the same day scientists announced they had recorded a mass bleaching of sea sponges in New Zealand waters for the first time ever.

An ocean heatwave damaged the sponges in the normally cold waters off Fiordland, in the country's southwest, raising concern about the impact climate change is having on marine ecosystems in the region.

Agence France-Presse

S&P cuts Russia's ratings to 'CC' on debt default risk

S&P on Thursday lowered its long-term sovereign credit rating on Russia to "CC" from "CCC-", as the country reported difficulties meeting debt-service payments on the due date on its US dollar-denominated 2023 and 2043 Eurobonds.

"Although public statements by the Russian Ministry of Finance suggest to us that the government currently still attempts to transfer the payment to the bondholders, we think that debt service payments on Russia's Eurobonds due in the next few weeks may face similar technical difficulties," the ratings agency said.

-reuters-