On Wednesday, the Dow ended the day with a 0.12% loss. However, the Nasdaq Composite Index and S&P 500 rose by 0.08% and 0.10%, respectively.
China Inflation, Ping An, and Fed Interest Rate Bets Influence Trends
Hopes of Ping An (HK:2318) acquiring beleaguered Country Garden (HK: 2007) faded, sinking the property sector. News hit the wires on Thursday of Ping An having no plans to take a controlling stake in Country Garden despite calls from Chinese authorities to step in.
Inflation figures from China also weighed on the Hang Seng Index. Consumer and producer prices from China reflected a weak demand environment. The October figures raised questions about the effectiveness of Beijing’s stimulus measures.
However, corporate earnings delivered positive ASX 200 and Nikkei 225 sessions.
Softbank Group Corp. (9984), Honda Motor (7267), Nissan Motor (7201), National Bank of Australia (NAB), and China Everbright (0165) were among the big names to release results on Thursday.
Fed Chair Powell and US Jobless Claims to Set the Tone
US jobless claims garnered investor interest after the recent unit labor cost numbers and the US Jobs Report. Initial jobless claims slipped from 220k to 217k in the week ending November 4. The modest decline had a limited impact on market risk sentiment.
During the FOMC press conference, Fed Chair Powell discussed the need for a softer labor market to support price stability.
However, Fed Chair Powell surprised the markets on Thursday. Fed Chair Powell reportedly said,
“The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance.”
The US equity markets responded to the Fed Chair. The Nasdaq Composite Index declined by 0.94%, with the Dow and S&P 500 ending the day down 0.65% and 0.81%, respectively.
The US Thursday session will set the tone for the Asian market session on Friday.
RBA Statement on Monetary Policy and Corporate Earnings in Focus
For the ASX 200, the RBA Statement on Monetary Policy will give investors an RBA view of the economy and interest rates. The RBA forecasts will garner interest after the RBA rate hike on Tuesday.
However, investors must consider corporate earnings results throughout the Friday session.
Futures Market and Closing Thoughts
In the futures markets on Friday, the ASX 200 and the Nikkei were down 12 and 90 points, respectively. While the fear of a more hawkish Fed will impact risk sentiment, corporate earnings could limit losses.