World shares are mixed as investors turn their attention to upcoming earnings reports and other economic indicators.
Global shares were trading mixed Thursday as investors turned their attention to upcoming earnings reports and other economic indicators.
France’s CAC 40 added 0.2% in early trading to 7,329.86, while Germany’s DAX rose 0.2% to 15,553.23. Britain’s FTSE 100 gained 0.5% to 7,697.24. The future for the Dow Jones Industrial Average was up less than 0.1% and that for the S&P 500 was almost unchanged.
Japan’s benchmark Nikkei 225 shed 1.2% to finish at 27,472.63. Australia’s S&P/ASX 200 slipped 0.3% to 7,219.00. South Korea’s Kospi fell 1.4% to 2,459.23. Hong Kong’s Hang Seng gained 0.3% to 20,331.20. The Shanghai Composite declined 0.3% to 3,312.63.
While efforts to cool inflation by raising interest rates are designed to slow overheated economies, the worry is that central bank policymakers might overdo it, leading to recession.
Many regional economies are seeing weakness in exports due to softer demand in major markets like the United States. That has dulled the impact of a rebound in China as its economy recovers from pandemic-related disruptions.
“We’re expecting strong retail activity data for March. But weaker export demand should drag on GDP. The government could provide stimulus to the economy after the release of the first quarter GDP data on 18 April,” Iris Pang, chief economist for ING said about the Chinese economy.
On Wednesday, the benchmark S&P 500 dipped 0.2% and the Dow industrials rose 0.2%. The Nasdaq composite dropped 1.1%.
A report from the Institute for Supply Management said that growth in the U.S. services sector slowed last month by more than economists expected, as the pace of new orders cooled. A separate report suggested private employers added 145,000 jobs in March, down sharply from February’s 261,000. Perhaps more importantly for markets, pay raises also weakened for workers, according to the ADP Research Institute.
ADP’s private payroll report could offer a preview of what Friday’s more comprehensive jobs report from the U.S. government will show. Economists expect it to say employers added 240,000 jobs last month, down from 311,000 in February.
If the job market really is slowing from the strong growth that’s helped to prop up the larger economy recently, it could offer the Fed reason to pause on its hikes to interest rates.
That’s a big deal for markets not only because it could lessen the odds of an upcoming recession, which some economists already see as a high probability. Higher rates also drag on prices for stocks, bonds and other investments.
Other reports on the economy this week also came in weaker than expected, including readings on the number of job openings across the country and the health of the manufacturing sector.
The reports have traders increasing bets for the Fed to hold rates steady at its next meeting in May, which would be the first time that’s happened in more than a year. Many traders are also betting the Fed will have to cut rates later this year, something that can act like steroids for markets.
The Fed, though, has consistently said it doesn’t expect to cut rates this year.
In other trading, benchmark U.S. crude fell 95 cents to $79.66 a barrel in electronic trading on the New York Mercantile Exchange. It lost 10 cents to $80.61 on Wednesday. Brent crude, the international standard, fell 91 cents to $84.08 a barrel.
The U.S. dollar inched down to 131.23 Japanese yen from 131.30 yen. The euro cost $1.0901, down from $1.0908.