MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17515.4 -261.49 -1.47%
Nasdaq 4909.76 -87.7 -1.75%
S&P 500 2046.68 -34.66 -1.67%
Japan: Nikkei 225 19737.6 -638.95 -3.14%
Hang Seng 23516.6 -1458.8 -5.84%
Shanghai Composite 3507.19 -219.93 -5.90%
S&P BSE Sensex 27687.7 -483.97 -1.72%
Australia: S&P/ASX 5469.5 -111.9 -2.00%
UK: FTSE 100 6490.7 58.49 0.91%
PRICE CHG YIELD%
U.S. 2 Year 3/32 0.545
U.S. 5 Year 9/32 1.489
U.S. 10 Year 18/32 2.195
Australia 10 Year 1 12/32 2.757
China 10 Year -16/32 3.53
India 10 Year -1/32 7.962
Japan 10 Year 12/32 0.413
German 10 Year -8/32 0.674
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7426 -0.0003
Yen (USD/JPY) 120.69 -0.01
S. Korean Won (USD/KRW) 1135.84 0.31
Chinese Yuan (USD/CNY) 6.2101 0.0014
Euro (EUR/USD) 1.1079 0.0002
WSJ Dollar Index 87.24 -0.01
LAST CHANGE % CHG
Crude Oil 51.83 -0.5 -0.96%
Brent Crude 57.59 0.23 0.40%
Gold 1157.5 4.9 0.43%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
The Dow Jones Industrial Average fell to a five-month low in a session marked by a nearly four-hour suspension of trading on the New York Stock Exchange and concerns about the pace of global growth. Treasury bonds strengthened and gold prices rose, while the dollar fell as minutes from the Federal Reserve's June policy meeting signaled caution in shifting into higher interest rates. Oil prices fell after a report showed an unexpected increase in supplies.
OPENING CALL:
Financial turmoil in China again takes center stage as this week's stock market selloff raises questions about investors' confidence in Beijing's ability to stem the slide. Elsewhere in Asia, the Bank of Korea's Monetary Policy Committee is widely expected to keep its benchmark interest rate on hold through the third quarter following a rate cut in
EQUITIES:
The Dow Jones Industrial Average fell to a five-month low in a session marked by a nearly four-hour suspension of trading on the New York Stock Exchange and concerns about the pace of global growth.
Declines were broad-based, with all S&P 500 sectors and the Dow's 30 components in negative territory.
U.S. stocks opened sharply lower after a continued selloff in Chinese stocks spread to Chinese government bonds and other markets in Asia, heightening fears about a potential drag on global economic growth.
Then, at 11:32 a.m. EDT, NYSE said it halted trading. The halt was in effect for nearly four hours, until 3:10 p.m. EDT. Trading on the NYSE accounts for about 15% of volume for S&P 500 stocks during the day, according to Credit Suisse.
Roughly 7.1 billion shares traded, higher than the 2015 average of 6.5 billion shares.
In addition to the tumble in Chinese shares, investors continued to watch news from Greece, which faces a Sunday deadline to come up with measures that could unlock further aid.
China introduced fresh measures to restore confidence, but that didn't stop investors from dumping stocks and Chinese bonds traded offshore. The Shanghai Composite fell 5.9% to 3507.19 even as hundreds of Chinese stocks were frozen from trading. The index has tumbled 32.1% since its mid-June peak. Hong Kong's Hang Seng Index, which has been holding up better than its mainland Chinese peers, erased its gains for the year.
Stocks in the U.S. have seesawed recently as investors pay attention to developments in Greece and China, leaving the Dow down 0.6% for the month. The blue-chip index has fallen 4.4% from its most recent record close.
Investors largely brushed off the release of minutes from the Federal Reserve's June meeting, where concerns about global tumult and soft spots in the U.S. economy weighed on Fed officials.
Commodities that depend on Chinese demand, such as copper, have seen their prices tumble recently. The Organization for Economic Cooperation and Development said growth is set to slow across an increasing number of the world's largest economies, including the U.S. and China.
But not everyone is convinced developments in China will have longer-term growth implications.
Andrew Slimmon, a portfolio manager at Morgan Stanley Wealth Management, says he isn't surprised by the "violent correction" in Chinese stocks after such a stunning rally earlier this year. Mr. Slimmon, who only invests in developed markets, said he remains overweight Japanese stocks as he doesn't believe the Chinese selloff will weigh on global growth in the longer run.
Among individual stocks, Microsoft Corp. said it would cut up to an additional 7,800 jobs and write down by roughly $7.6 billion the value of its mobile-phone business. Shares slipped 0.1%.
FOREX:
The dollar fell against the yen and the euro, after minutes from the most-recent Federal Reserve policy meeting showed the central bank remained cautious about the U.S. economy and raising interest rates.
The minutes from the Federal Open Market Committee also warned about the pace of growth beyond the U.S., specifically in China, as well as turbulence that could result from the Greek debt crisis. Those are developments that have grown even more uncertain since the central bank's two-day meeting concluded on June 17 and which have weighed on markets this week.
The FOMC minutes likely nudged back the timing of the central bank's first interest-rate increase in nine years toward the end of the year or perhaps even into 2016. Higher U.S. rates would make the dollar more attractive, as they would increase returns on dollar-denominated investments.
The FOMC minutes expressed concern over how slowly consumer spending was rising, a support to U.S. growth that largely has been stubbornly lackluster. Furthermore, some officials "were concerned that consumers could remain cautious or that the drag on sectors affected by lower energy prices and the higher dollar could persist," according to the minutes.
China's recent equity-market selloff has raised questions about other possible distortions in the world's second-largest economy that could affect global growth, sending ripples across the financial markets.
Meanwhile, investors watched as Greece requested a three-year bailout from the eurozone's rescue fund to prevent a meltdown in its banking system and its exit from the eurozone. Investors and Fed officials, FOMC minutes show, have been worried about the potential turbulence a Greek exit could generate in Europe's financial markets and possibly the U.S.
The uncertainty encouraged investors to move into assets perceived to hold their value in uncertain or turbulent times, such as the Japanese currency, which gained for a fifth consecutive session.
BONDS:
U.S. Treasury bonds strengthened for a fourth consecutive session as the minutes from the Federal Reserve's June policy meeting signaled continued caution in shifting into higher interest rates.
A deepening rout in China's stock markets heightened anxiety over the potential knock-on effect on the global growth outlook, adding to demand for ultrasafe U.S. government debt.
U.S. bond yields have dropped in July after the biggest rise in two years during the second quarter. Greece's debt crisis and a sharp pullback in China's stock markets after a recent strong bull run have driven investors to cut risks and preserve capital in haven bond markets. The twin factors are complicating the Fed's plan to raise short-term rates for the first time since 2006.
In a sign that investors dialed back risk, U.S. stocks sold off and U.S. crude-oil prices settled at the lowest level in near three months. A $21 billion sale of 10-year Treasury notes drew solid demand from both domestic and foreign investors. Buyers accepted a yield of 2.225%, lower than what dealers had expected.
The Fed minutes showed that most central bank officials wanted more information before raising rates, with several mentioning uncertainties about Greece and China.
Investors say the global uncertainties mean the Fed will continue to monitor data. Should external factors derail the U.S. economic outlook, the Fed could delay the timing of its tightening campaign.
The International Monetary Fund on Tuesday reiterated its call for the Fed to delay raising interest rates until 2016. Higher interest rates by the Fed would shrink the value of outstanding bonds.
Fed-funds futures, used by investors and traders to place bets on central bank policy, showed that investors and traders see a 7% likelihood of a rate increase at the September 2015 meeting following the Fed minutes, according to data from the CME Group. The odds were 9% right before the release.
The odds for a rate increase at the December 2015 meeting were 37% compared with 39% before the minutes' release.
The bond market's price strength was contained because of signs of progress in Greece's debt talks, though many investors remain cautious and await a clear outcome.
The cash-strapped country formally requested a three-year bailout from the eurozone's rescue fund and pledged to start implementing some of the overhauls demanded by its creditors.
COMMODITIES:
U. S. oil prices fell for a fifth straight session after weekly inventory data showed an unexpected increase in crude supplies.
(MORE TO FOLLOW) Dow Jones Newswires
July 08, 2015 17:30 ET (21:30 GMT)
Commercial crude-oil stockpiles rose by 400,000 barrels in the week ended July 3, the U.S. Energy Information Administration said. Analysts surveyed by The Wall Street Journal had expected a drop of 1 million barrels. Supplies usually decline in the summer as refineries process more crude oil into gasoline and other fuels.
Crude inventories starting shrinking in April after hitting a record high, boosting prices, but the last two reports have surprised the market by showing stockpile builds.
"This puts some water on the fire," said Donald Morton, senior vice president at Herbert J. Sims & Co., who oversees an energy-trading desk.
Prices slumped earlier in the week on concerns about growing crude production in the U.S. and the Organization of the Petroleum Exporting Countries, and worries that an economic crisis in Greece and the stock-market selloff in China could slow economic growth and weaken global oil demand. Ongoing negotiations on Iran's nuclear program, which could lead to a lifting of sanctions on Iranian crude exports, added to the uncertainty.
The EIA also reported that gasoline stockpiles rose 1.2 million barrels, as demand fell from the prior week. Analysts had predicted inventories would be unchanged in the week.
Strong gasoline consumption has been an important factor buoying prices in recent weeks amid ongoing concerns about a global glut of crude.
"Gasoline was serving as the last leg of support," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Those demand checkpoints have come undone a little bit on this report, so this would imply that you may see a little bit of a pullback" in price, he said.
While macroeconomic events have driven moves in the oil market in recent days, new data due Friday could refocus traders on supply and demand. The International Energy Agency's closely watched monthly report is scheduled to be released, along with fresh data on the number of rigs drilling for oil in the U.S.
Gold prices rose, buoyed by a weaker dollar and investor expectations that financial turmoil in Greece and steep losses on China's stock markets would prevent the Federal Reserve from raising interest rates in coming months. Gold prices hit a three-and-a-half-month low in early trading but rebounded as investors anticipated the Fed minutes would hold no surprises.
TODAY'S HEADLINES:
NYSE Trades Resume After Halt
The New York Stock Exchange resumed trading after technical problems forced a halt earlier, jarring investors and traders already unnerved by recent volatility across global financial markets. The NYSE was quick to dismiss speculation that the trading disruption was caused by hacking.
Global Tumult Gives Fed Some Pause on Rates
Worries about global turbulence and soft spots in the U.S. economy weighed on Federal Reserve officials when they gathered in June, trepidations that could cause them to wait longer before raising interest rates.
Chinese Government Struggles to Calm Market
The Chinese government struggled in vain to prevent the distress in the country's stock markets from spreading, as it openly fought market forces it has pledged to give a larger role.
Alcoa Reports Higher Profits
Alcoa's second-quarter earnings rose 1.4% as the metals producer's growth in the automotive and aerospace markets helped to offset weak aluminum prices.
Greece Requests New Three-Year Bailout
Greece formally asked for a three-year bailout from the eurozone's rescue fund Wednesday, according to a copy of the letter seen by The Wall Street Journal, though Germany said it wouldn't consider the request until it sees a full list of reforms.
Barclays Fires Chief Executive Antony Jenkins
Barclays PLC Chief Executive Antony Jenkins was ousted from the bank after its board decided fresh blood is needed after three lackluster years with Mr. Jenkins at the helm.
Microsoft to Cut 7,800 Jobs Amid Phone Woes
Microsoft plans to cut up to 7,800 jobs and write down the value of its Nokia purchase by roughly $7.6 billion, which Microsoft acquired last year in a deal valued at $9.4 billion including acquired cash.
Malfunctioning Computer Router Caused Grounding of United Flights
United said the grounding of its flights had been caused by a computer-network router that malfunctioned, which disrupted its passenger reservations system. That meant that many passengers couldn't check in for their flights.
U.K.'s George Osborne Plans Corporate Tax Cut
The U.K.'s Chancellor of the Exchequer George Osborne announced further cuts to the corporate tax rate as he set out his first package of tax-and-spending plans following national elections in May.
Samsung Merger Plan Fails to Get Canada Pension Board Approval
Canada Pension Plan Investment Board has voted against a proposed merger of two Samsung companies seen as an important step in the controlling Lee family's succession plans at the South Korean conglomerate.
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Apple Preparing Record Number of New iPhones
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For Some in Syriza, a Greek Euro Exit Is Goal
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TODAY'S CALENDAR:
(All times GMT, followed by country and event)
2245 NZ Jun Electronic Card Transactions
2350 JPN May Orders Received for Machinery
2350 JPN Jun Money Stock, Broadly-defined Liquidity
0100 SKA Jul Bank of Korea Monetary Policy Committee meeting and decision
0130 CHN Jun CPI
0130 CHN Jun PPI
0130 AUS Jun Labour Force
0500 SKA H2 Bank of Korea Economic Outlook for second half of the year
0600 JPN Jun Preliminary Machine Tool Orders
0600 JPN Jun Preliminary Machine Tool Orders
0600 GER May Foreign Trade
0900 FRA OECD Employment Outlook report launch
0900 EU Q1 Balance of payments - 2nd release
1000 MAL Malaysia Monetary Policy Committee Meeting & Statement
1000 FRA May OECD Harmonised Unemployment Rates
1100 UK Jul UK interest rate decision
1215 CAN Jun Housing Starts
1230 US U.S. Weekly Export Sales
1230 US 07/04 Unemployment Insurance Weekly Claims Report - Initial Claims
1230 CAN May New Housing Price Index
1300 US IMF World Economic Outlook Update
1345 US Bloomberg Consumer Comfort Index
1400 US Federal Reserve Board Governor Lael Brainard speaks at Bipartisan Policy Center event
1430 US 07/03 EIA Weekly Natural Gas Storage Report
1600 US Jun Monthly U.S. Retail Chain Store Sales Index
1615 US OECD The Future of Productivity report launch
2030 US Money Stock Measures
2030 US Foreign Central Bank Holdings
2030 US Federal Discount Window Borrowings
2350 JPN Jun Corporate Goods Price Index
(END) Dow Jones Newswires
July 08, 2015 17:30 ET (21:30 GMT)
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