Asia flat following weaker Wall Street as Treasury yields rise

SINGAPORE - Asian shares were flat in early trade on Friday following mostly sluggish sessions on Wall Street and Europe, as 10-year US Treasury yields surged to near 18-month highs and crude futures soared to 16-month highs.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, but remained on track to end the week up 0.6 percent.

Japan's Nikkei, which jumped to an 11-month high on Thursday, slipped 0.6 percent early on Friday as the yen strengthened. It is set for a weekly gain of 0.1 percent.

Yields on 10-year US Treasuries touched 2.492 percent on Thursday, the highest since June 2015, after data showed factory activity accelerating in November and construction spending at a seven-month high in October.

The strong data boosted the case for higher interest rates, expectations for which have already jumped on promises of fiscal stimulus from the incoming Trump administration and rising oil prices, both potential contributors to inflation.

Investors are now looking to November's employment report due later in the session for further evidence of improvement in the economy.

Global benchmark Brent futures jumped to a 16-month high of $54.53 a barrel on Thursday after the Organization of Petroleum Exporting Countries agreed its first output cuts since 2008. Russia also agreed to join output cuts for the first time in 15 years.

US crude, which climbed 13 percent on Wednesday and Thursday combined, extended the gains to Friday, climbing 0.2 percent to $51.17. It is on track for an increase of 11.1 percent this week.

"Support for energy stocks may carry through today as oil prices continue to rise in response to OPEC's production agreement," Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.

While the increase in risk appetite helped lift the Dow Jones Industrial Average to a record closing high, the S&P 500 and the Nasdaq ended the day with losses as expensive technology stocks pulled back.

Earlier, European markets also had a lackluster session, with the STOXX 600 down 0.3 percent at the close after pulling back from the previous session's three-week high.

Investors remained nervous ahead of a constitutional referendum in Italy and a presidential election in Austria this weekend.

"A weak lead from US markets, Italy's referendum and tonight's release of U.S. jobs data all provide reasons for the stock market to close the week in cautious, wait-and-see mode," Spooner said.

The dollar, which hit the highest level since February versus the yen earlier on Thursday, retreated after weekly jobless claims, which hit a 43-year low in mid-November, rose to its highest level in five months last week.

Despite the increase, claims remained below the 300,000 threshold, which is associated with a healthy labor market, for the 91st straight week, and layoffs fell 12 percent during the month.

The dollar closed down 0.3 percent on Thursday and was trading 0.1 percent lower at 113.78 yen early on Friday, but remains on track for a weekly gain of 0.5 percent.

The dollar index, which tracks the greenback against a basket of six major global peers, also slipped 0.1 percent on Friday, extending losses for the week to 0.6 percent.

The British pound touched a near-two-month high versus the dollar on Thursday after Brexit minister David Davis said Britain would consider paying into the European Union budget for market access.

Sterling was steady at $1.2585 in early Asian trade on Friday.

The euro also strengthened on Thursday, rising 0.7 percent, and was steady at $1.06640 on Friday.

source: news.abs-cbn.com

Apple stock extends losses after China warning on Trump

SAN FRANCISCO - Apple's stock extended recent losses on Monday after a warning that iPhone sales could suffer if President-elect Donald Trump follows through on campaign threats to impose new tariffs on China.

Apple is among several major technology stocks, including Amazon.com, Facebook and Alphabet, selling off since Tuesday's election as investors shift funds into financial and public works companies seen benefiting from deregulation and infrastructure spending under President-elect Trump.

In a continuation of that trend, the Cupertino, California company's stock fell 2.5 percent on Monday, bringing its loss since Tuesday's election to almost 5 percent, compared to the S&P 500's 1.16 percent advance.

Adding to concern for Apple investors, an op-ed published in the China government-backed Global Times on Sunday warned of "tit-for-tat" retaliation should Trump follow through on a campaign pledge to impose 45-percent tariffs on all imports from China.

"A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted," the op-ed said.

China has already become a disappointment for Apple, failing to deliver rapid growth that the company hoped would make up for slower iPhone sales in the United States and other mature markets.

Revenue from China slumped 30 percent in Apple's September quarter, worse than the Americas' 7 percent decline.

Apple's China sales could be hurt by potential trade conflicts as well as the country's weakening currency, said Rosenblatt Securities analyst Jun Zhang by email. He said he believes China iPhone sales fell in October, even after fixing supply issues affecting the iPhone 7 Plus.

Synovus Trust Company Senior Portfolio Manager Daniel Morgan, who owns $33 million worth of Apple shares, warned not to read too much into Trump's campaign trail threats against China, at least in the near term.

"You just don't just jump in and start rewriting trade agreements," Morgan said.

source: www.abs-cbnnews.com