Asian stocks opened lower after a drop in U.S. equities, with investors digesting mixed corporate earnings and worsening economic data.
Japanese shares slid as Tokyo traders returned from Golden Week holidays, and Korean equities dipped. Treasuries edged up, taking back some of their recent declines amid a surge in U.S. debt issuance. Futures on the S&P 500 were flat after the index declined overnight. The dollar held gains, while the yen continued to trade near the highest since mid-March.
A Wednesday report showing U.S. companies cut a record 20.2 million jobs in April showcased the economic damage of the coronavirus, before Friday’s official payrolls report. On the virus front, California reported its largest one-day jump in new cases, while Germany, the U.K., Denmark and the Netherlands are planning additional steps to ease their restrictions.
As for earnings, signals from drug makers and online grocers have been encouraging, though insurers, banks and carmakers have added to the chorus of companies taking a heavy hit.
“We remain concerned about the potential for the pandemic to have lasting effects on growth,” wrote Ron Temple, co-head of multi-asset and head of U.S. equity at Lazard Asset Management. “Countries and companies are likely to exit the crisis with significantly higher debt, curtailing their ability to invest and innovate.”
Meantime, bonds declined in the euro region as investors fretted over Tuesday’s German court ruling criticizing the European Central Bank’s easing measures. The euro weakened amid a slew of bleak economic forecasts by the EU.
Here are some key events coming up:
- The Bank of England has a policy decision on Thursday.
- Friday brings the U.S. jobs report for April, expected to show a severe impact from the pandemic. The median forecast in a Bloomberg survey of economists calls for a 21 million plunge in payrolls.
These are some of the main moves in markets:
Stocks
- Futures on the S&P 500 Index was little changed as of 9:10 a.m. in Tokyo. The index fell 0.7% on Wednesday.
- The Topix Index dropped 0.8%.
- Australia’s S&P/ASX 200 Index fell 0.4%.
- Kospi Index fell 0.5%.
- Hong Kong’s Hang Seng Index contracts fell 0.8% earlier.
Currencies
- The yen was little changed at 106.21 per dollar.
- The offshore yuan traded at 7.1280 per dollar.
- The euro was at $1.0798, after dropping 0.4% Wednesday.
Bonds
- The yield on 10-year Treasuries dipped two basis points to 0.68%.
- Australian 10-year yields were flat at 0.93%.
Commodities
- West Texas Intermediate crude slipped 0.3% to $23.91 a barrel.
- Gold rose 0.3% to $1,691 an ounce.
— With assistance by Adam Haigh
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