TOKYO (AP) — Asian stocks were subdued on Wednesday as the attention turned to the possibilities of enhanced China-U.S. relations ahead of meetings next week during the Pacific Rim summit.Thank you for reading this post, don't forget to subscribe!
The Asia-Pacific Economic Cooperation Forum gatherings in San Francisco present an opportunity for the top leaders of the US and China to reconcile strained trade and political relations.
President Joe Biden and Xi Jinping are slated to convene then, and White House officials are projected to make some minor announcements as part of the tête-à-tête, but the fundamental differences in the relationship will remain unaltered.
US Treasury Secretary Janet Yellen is planned to meet with Chinese Vice Premier He Lifeng in San Francisco on Thursday and Friday, prior to the finance ministers of APEC member countries officially launching the summit on Saturday.
Early Wednesday, Hang Seng in Hong Kong rose 0.1% to 17,678.36, while the Shanghai Composite held steady at 3,058.87. The disillusionment from export data worse than anticipated has erased any positive momentum from an upgrade to China’s growth projection by the International Monetary Fund. It raised its GDP growth forecast for 2023 to 5.4% from 5%, but predicted growth would decelerate next year.
Nikkei 225, Japan’s benchmark, declined 0.7% to 32,058.44. Kospi, South Korea’s index, dropped 0.4% to 2,433.37.
Meanwhile, S&P/ASX 200 in Australia gained 0.1% to 6,982.90.
Moody’s Investors Service confirmed the Government of Japan’s A1 long-term foreign currency and local currency issuer and local currency senior unsecured ratings. The outlook was maintained stable.
“Today’s rating action reflects Moody’s expectation that Japan’s ability to handle its exceedingly large debt burden remains intact, based on the maintenance of its formidable credit strength, including strong domestic liquidity driven by continued growth of private-sector savings,” it stated.
According to Moody’s, the primary concerns for Japan were its “structural weaknesses,” such as its aging population.
S&P 500 advanced 0.3% to 4,378.38 on Wall Street on Tuesday, as gains in certain Big Tech stocks mitigated losses for most of the index’s stocks.
Dow Jones Industrial Average climbed 0.2% to 34,152.60 and Nasdaq Composite gained 0.9% to 13,639.86.
TripAdvisor surged 11% after delivering results for the summer that surpassed expectations, while Emerson Electric declined 7.4% after falling short of projections.
Thus far this earnings reporting season, most prominent companies have exceeded estimates, but another factor has vastly influenced the stock market’s significant fluctuations since the summer: the bond market.
The 10-year Treasury yield reached 4.59% early Wednesday, decreasing from 4.66% late Monday to 4.56% on Tuesday.
Earlier in the summer, a rapid ascent in Treasury yields unnerved the stock market. Yields were increasing to align with the Federal Reserve’s key interest rate, surpassing 5.25% and reaching its highest level since 2001 in an effort to control high inflation. Elevated rates and yields harm stock prices, impede economic growth, and exert pressure on the entire financial system.
However, yields sharply declined last week after investors picked up on insinuations from the Federal Reserve regarding a potential hike in interest rates. More speeches from Fed officials this week could emerge as the primary driver of financial markets.
WeWork ceased trading after the office-sharing company filed for Chapter 11 bankruptcy protection. This marks an astonishing downfall for a company that vowed to revolutionize global work habits. Its stock has plummeted 98.5% this year, previously estimated at $47 billion.
In energy trading, crude oil prices offset some recent losses. A barrel of standard U.S. crude oil dipped 13 cents to $77.24. It declined $3.45 to $77.37 on Tuesday, returning to July levels before concerns about potential supply disruptions arose due to the Israel-Hamas conflict.
Brent crude, the international benchmark, increased 6 cents to $81.67 per barrel.
In currency trading, the U.S. dollar rose to 150.50 JPY from 150.37 yen. The euro decreased from $1.0702 to $1.0691.
AP Business Writer Stan Cho contributed.
Yuri Kageyama, The Associated Press