Stocks in Asia declined as trading got underway Tuesday after weakness in some of the biggest technology companies sent U.S. stocks tumbling, adding to pessimism about escalating trade tensions. The yen ticked higher while the dollar and Treasuries were little changed.
Equities fell in Japan, Australia and South Korea, while futures tipped a weaker open in Hong Kong. S&P 500 Index futures were also weaker after software developers and semiconductor manufacturers led the gauge lower Monday. The Nasdaq 100 Index plunged more than 3 percent to the lowest since April on renewed concern the trade war will hurt global demand and disrupt supply chains for the major technology companies that have carried the bull market for almost 10 years. Japanese automakers were under pressure with Nissan Motor Co. tumbling after the arrest on misconductallegations of the carmaker’s chairman, Carlos Ghosn.
Investors are reassessing their expectations after several weeks of volatility spurred by fears of an escalation of the trade conflict and a slowing global economy. Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said that investors should expect low returns for a long time after years of low interest rates and quantitative easing have squeezed most of the returns out of assets in the U.S. Meanwhile, optimism that relations between the U.S. and China would improve at Group-of-20 meetings starting next week, dissipated.
“A breakthrough is really about slowing down the pace of tariffs or potentially not allowing the $200 billion to move at year end up to a 25 percent tariff from a 10 percent tariff,” Darrell Cronk, president at Wells Fargo Investment Institute, said on Bloomberg TV. “Just an agreement to restart discussions and negotiations in the next year the markets would perceive as strong, positive and good for risk assets.”
Elsewhere, the pound fluctuated as U.K. Prime Minister Theresa May appealed to business leaders to help deliver her Brexit deal, and Gibraltar emerged as a fresh sticking point. Bitcoin fell below $5,000 for the first time since October 2017. Crude rose past $57 a barrel.
(source: bloomberg.com)
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