GLOBAL MARKETS-Nasdaq falls while the dollar, bond yields gain
The Nasdaq was lower on Friday with pressure from Apple Inc while the dollar gained and U.S. Treasury yields rose as investors shied away from riskier bets.
The mood was jittery as the gift-buying season kicked off on a scheduled half-day for U.S. markets after the Thanksgiving holiday, with investors watching out for signs of weakness in consumer spending with inflation still soaring. While shoppers often turn out in record numbers with hopes of Black Friday discounts, so far, crowds were thin outside stores on what is historically the busiest shopping day.
“It’s a very competitive environment for retail, both price cutting and who’s best positioned for inventory will play a big part in how you do over the season,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. “Margins will be squeezed and profits will be lower … bigger question will be company forecasts for next year and whether investors think this is a reciprocal bottom or start of a new trend and reduced spending.”
Adding to inflation concerns, market heavyweight Apple’s shares were weighed down by concerns about Foxconn. The manufacturer’s flagship iPhone plant in China was expected to show a November shipment slowdown as thousands of employees left in the latest bout of worker unrest, Reuters reported, citing an unnamed a source with direct knowledge of the matter. The Dow Jones Industrial Average rose 162.09 points, or 0.47%, to 34,356.15, the S&P 500 gained 3.96 points, or 0.10%, to 4,031.22 and the Nasdaq Composite dropped 38.45 points, or 0.34%, to 11,246.87.
MSCI’s gauge of stocks across the globe shed 0.10%. Europe’s STOXX 600 was down 0.23% on Friday but heading for a 1.5% weekly gain, which would be its sixth weekly percentage gain in succession, and the first such streak since late 2021.
The U.S. dollar crept higher across the board in what looked like a quiet session but it remained near multi-month lows as the prospect of the Federal Reserve moderating the pace of its policy tightening weighed on the U.S. currency. “Today has all the indicators of another session dominated by USD consolidation in lieu of any major cross-asset drivers,” said Simon Harvey, senior FX analyst at Monex Europe adding that “liquidity is quite limited.”
The dollar index rose 0.189%, with the euro down 0.09% to $1.0399. The Japanese yen weakened 0.46% versus the greenback at 139.25 per dollar, while sterling was last trading at $1.2085, down 0.21% on the day.
The U.S. Federal Reserve has raised interest rates aggressively throughout this year, but a “substantial majority” of Fed policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate rises, minutes of their latest meeting showed on Wednesday. This added to optimism from earlier this month when data U.S. October inflation was cooler than expected.
U.S. Treasury yields inched higher on Friday, offseting some of Wednesday’s declines when the Fed’s November meeting minutes were released. Benchmark 10-year notes were up 2.4 basis points to 3.733%, from 3.709% late on Wednesday.
The 30-year bond was last up 3.2 basis points to yield 3.7741%, from 3.742%. CHINA’S COVID-19 CONCERNS
Earlier Asian shares had struggled after China reported another record rise in daily COVID infections, with cities nationwide imposing localised lockdowns, mass testing and other curbs, dashing recent hopes it would end zero-COVID policies. Hong Kong’s Hang Seng had closed down 0.5%, led by a 2.3% tumble for technology, though Chinese onshore bluechips rose 0.5%, buoyed by more government measures to support the slumping real estate market.
Oil prices were stable on Friday in thin market liquidity, closing a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil. U.S. crude rose 0.4% to $78.25 per barrel and Brent was at $85.42, up 0.09% on the day.
Gold prices retreated after the precious metal posted gains in the previous three sessions on expectations the U.S. Federal Reserve would scale back its rate-hiking stance. Spot gold dropped 0.3% to $1,749.68 an ounce. U.S. gold futures gained 0.25% to $1,749.20 an ounce.
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