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Asian Stocks Stumble, Tech Damps US Equity Futures: Markets Wrap

(Bloomberg) — Asian stocks struggled to find traction on Wednesday while US and European equity futures slumped as a downbeat revenue forecast from Microsoft Corp. added to risk aversion in global markets.

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Contracts for the Nasdaq 100 dropped about 0.8%, following a slight decline in the underlying index on Tuesday. Futures for the S&P 500 also fell, as did those for the Euro Stoxx 50. Japan’s Topix index fluctuated and Australian shares erased early gains as inflation data soured sentiment.

South Korea’s Kospi index surged more than 1% in a catchup move after Lunar New Year holidays. Hong Kong and mainland China markets remain closed.

Microsoft erased gains in post-market trading in the US after warning that revenue growth in its Azure cloud-computing business would decelerate, tarnishing what had been an encouraging profit report.

Treasuries in Asia trading held gains after a rally Tuesday in the US as investors sought havens.

Australian and New Zealand 10-year yields fell more than 10 basis points before reversing the move to trade little changed. The turnaround followed inflation data for the two countries that came in higher than estimates, keeping pressure on their central banks to remain aggressive in fighting inflation.

The data also offers a warning to global investors that peak inflation may not be as close at hand as some expect.

Australia’s dollar advanced and New Zealand’s dollar fell.

Oil rose after a drop on Tuesday and gold inched higher to extend recent gains, pushing the precious metal to the highest level since April.

US business activity contracted for a seventh month, although at a more moderate pace, while a measure of input prices firmed in a sign of lingering inflationary pressures. S&P Global purchasing managers index data showed a light improvement on previous months although activity remains contractionary.

Microsoft’s news capped a busy day for quarterly corporate profit reports. Homebuilder DR Horton Inc. also beat projections, while 3M Co., the maker of Post-it notes, forecast profit that trailed estimates and Texas Instruments Inc., one of the world’s largest chipmakers, suffered its first sales decline since 2020.

Bitcoin fell as much as 2.5% and faced its first two-day drop this year after Microsoft’s outlook dented investor confidence in the cryptocurrency.

The US trading day was marred by a New York Stock Exchange system issue that drove Wells Fargo & Co. sharply down and AT&T Inc. sharply up in the opening seconds of trade before the normal operations returned 20 minutes later. The exchange said some trades would be declared “null and void” after the glitch caused hundreds of securities to begin trading without an opening auction price.

The declines for US stocks came on the same day perma-bull Jeremy Grantham, the co-founder and long-term investment strategist of GMO, who predicted the dot-com crash and the 2008 financial crisis, said the S&P 500 could tumble 17% this year.

Key events this week:

  • Earnings for the week include: Abbott Laboratories, ASML Holding, AT&T, Boeing, International Business Machines, NextEra Energy, Tesla (Wednesday); American Airlines, Blackstone, Comcast, Diageo, Intel, LVMH Moet Hennessy Louis Vuitton, Mastercard, SAP, Southwest Airlines, Visa (Thursday); American Express, Charter Communications, Chevron, HCA Healthcare (Friday)

  • US MBA mortgage applications, Philadelphia Fed non-manufacturing activity, Wednesday

  • US fourth-quarter GDP, new home sales, initial jobless claims, Thursday

  • US personal income/spending, PCE deflator, University of Michigan consumer sentiment, pending home sales, Friday

Some of the main moves in markets:

Stocks

  • Futures for the S&P 500 fell 0.5% as of 11:18 am Tokyo time. The S&P 500 fell 0.1%

  • Futures for the Nasdaq 100 fell 0.8%. The Nasdaq 100 fell 0.2%

  • Euro Stoxx 50 futures fell 0.2%

  • Japan’s Topix Index rose 0.2%

  • Australia’s S&P/ASX 200 fell 0.2%

Currencies

  • Bloomberg Dollar Spot Index fell 0.1% to 1,223.09

  • The euro rose 0.1% to $1.0898

  • The Japanese yen was little changed at 130.12 per dollar

  • The offshore yuan rose 0.2% to 6.7738 per dollar

  • The Australian dollar rose 0.7% to $0.7093

Cryptocurrencies

  • Bitcoin fell 1.6% to $22,533.18

  • Ether fell 3.7% to $1,539.45

Bonds

  • The yield on 10-year Treasuries was unchanged at 3.45%

  • Japan’s 10-year yield rose one basis point to 0.415%

  • Australia’s 10-year yield advanced one basis point to 3.48%

Commodities

This story was produced with the assistance of Bloomberg Automation.

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