Asian markets fall after US GDP figures

The Associated Press

A large skyscraper in a city: Mount Fuji is seen behind Tokyo's horizon.

© Bloomberg News
Mount Fuji appears behind Tokyo’s horizon.

US stocks fell on Friday as layoffs of US workers continue at high levels, as the US economy contracted at an almost 33% annual pace in the spring, the worst quarter on record.

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The earnings report added to the gloom, a gauge of how well the coronovirus epidemic is handling the decline. Some technology companies have bucked the trend and are showing positive results. But many companies are at a disadvantage.

Japan’s Nikkei 225 (JP: NIK) dropped 2.3% while Hong Kong’s Hang Seng Index (HK: HSI) rose 0.2%. The Shanghai Composite (CN: SHCOMP) was about flat while the small-cap Shenzhen Composite (CN: 399106) gained 0.3%. South Korea’s Kospi (KR: 180721) slipped 0.2%, Taiwan’s Taiex (TW: Y9999) fell 0.3% and Australia’s S & P / ASX 200 (AU: XJO) fell 1.6%. Markets in Singapore, Malaysia and Indonesia were closed for the holidays.

August is a cheap month for stocks, AxiTrader Corp. K Stephen Innes is mentioned.

“The stock markets are looking exceptionally corrective to the extent that we can enter a pullback phase, as we head in August, commonly referred to as the beginning of summer,” Innes Said in a comment.

In a positive sign, China reported its manufacturing activity in July and export orders strengthened despite weak US and European demand. The monthly survey released on Friday was another indication that the world’s second largest economy is slowly recovering from the coronovirus epidemic.

Central bank meetings for various countries are on the agenda for the coming week.

“The second quarter GDP for Indonesia and the Philippines will also highlight the impact of the epidemic,” said Bernard Ava, chief economist at IHS Markit in Singapore.

The Japanese government said that late Thursday night the country’s economy was expected to sink 4.5% for the fiscal year ending in March 2021. It forecasts a return of growth in the next fiscal year.

Japanese companies earning next week include Sony Corp (JP: 6758), Honda Motor Company (JP: 7267), Toyota Motor Corp (JP: 7203) and Nintendo Co. (JP: 7203).

Some companies are holding a better grip than others.

Japanese media reports said Toyota was again to become the No. 1 automaker in the world, overtaking Volkswagen, which is now the top manufacturer in global vehicle sales. Toyota sales were already recovering in markets such as China, which according to the company are recovering from their initial outbreaks of COVID-19.

Overnight, the US reported that the economy expanded at a 32.9% annual rate, with record twists and turns in April-June.

The outbreak of the outbreak as news of a deep, steep collapse has pushed businesses in many areas to close for a second time. The government’s projected second-quarter decline in GDP is no comparison since the record began in 1947. The previous worst quarterly contract – at 10%, less than a third of what was reported on Thursday – occurred in 1958 during the Eisenhood administration.

The bad news was no big surprise, and on Wall Street, the S&P 500 (SPX) fell 0.4% to 3,246.22. Three out of four stocks fell in the index. Oil-producers, banks and other companies were the most difficult, the economy most needed to survive the recession.

The Dow Jones Industrial Average (DJIA) declined 0.9% to 26,313.65.

The stock seemed poised for a much larger decline on the first day, but strong-than-expected profits reported by UPS and other companies helped the market trim its losses. Hence continued price increases for Amazon and other large tech-oriented stocks, which reported their own results after the day’s trading ended.

His report’s perception of Wall Street being better than expected erased its initial loss to the Nasdaq Composite (COMP) and climbed 0.4% to 10,587.81.

But overall, earnings reports have remained well below the level in the years before the epidemic. According to FactSet, large companies in the S&P 500 are on track to report a nearly 38% decline for the second quarter.

Shortly after trading ended for the day, Amazon (AMZN), Apple (AAPL), Facebook (FB) and Google’s parent company Alphabet (GOOGL) (GOOGL) all posted larger profits for the latest quarter than Wall Street. Had entered Investors continue to expect them to expect the epidemic to accelerate towards online commerce.

Benchmark US crude (CLU20) gained 14 cents to $ 40.06 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude (UK: BRNU20), the international standard, rose 37 cents to $ 43.31 a barrel.

The dollar (USDJPY) slipped from 104.23 yen to the Japanese yen at 104.22.

Video: Dips on concerns about S&P earnings, data, incentives and elections (Reuters)

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