Asian shares fall as US Tech sinks; Bonds Steady: Markets wrap

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Published: November 20, 2018 11:46:31 AM

Stocks in Asia declined Tuesday after weakness in some of the biggest technology companies sent U.S. stocks tumbling, adding to pessimism about a breakthrough in trade tensions.

In the U.S. session, the Nasdaq 100 Index plunged more than 3 percent to the lowest since April. Apple Inc. slumped on signs of slowing demand for iPhones, while Facebook Inc.’s public image continued to weigh on its share price.

Stocks in Asia declined Tuesday after weakness in some of the biggest technology companies sent U.S. stocks tumbling, adding to pessimism about a breakthrough in trade tensions.

Equities fell from Tokyo to Sydney as S&P 500 Index futures extended losses. Earlier, U.S. software developers and semiconductor manufacturers led the U.S. gauge lower Monday amid a myriad of concerns swirling around the tech sector. Japanese automakers were under pressure with Nissan Motor Co. tumbling after the arrest on misconduct allegations of the carmaker’s chairman, Carlos Ghosn. The dollar and Treasuries were little changed.

In the U.S. session, the Nasdaq 100 Index plunged more than 3 percent to the lowest since April. Apple Inc. slumped on signs of slowing demand for iPhones, while Facebook Inc.’s public image continued to weigh on its share price. Chipmaker Nvidia Corp. plunged almost 28 percent in two days after disappointing earnings, sending shock waves through chipmakers.

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 stabilized 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 traded around $57 a barrel.

The Australian dollar declined and 10-year bond yields climbed as the central bank reaffirmed the next move in interest rates “was more likely to be an increase,” though added that there was “no strong case” for a near-term policy adjustment in the minutes of November policy meeting.

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Coming Up
Bank of England Governor Mark Carney appears before parliament on Tuesday. It’s a shortened trading week because of the Thanksgiving holiday in the U.S. on Thursday. In addition, Black Friday, the day after Thanksgiving, marks the traditional start to the U.S. holiday shopping season.

These are the main moves in markets:

Stocks
Japan’s Topix index fell 0.9 percent as of 2:05 p.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 0.5 percent. South Korea’s Kospi index lost 1.1 percent. Hong Kong’s Hang Seng Index declined 1.9 percent. Shanghai Composite Index retreated 1.6 percent. S&P 500 futures fell 0.3 percent. The S&P 500 sank 1.7 percent, while the Nasdaq 100 plunged 3.3 percent.

Currencies
The Japanese yen traded at 112.52 per dollar. The offshore yuan was steady at 6.9379 per dollar. The Bloomberg Dollar Spot Index was little changed. The euro traded at $1.1448, down 0.1 percent. The British pound traded at $1.2857.

Bonds
The yield on 10-year Treasuries held around 3.06 percent. Australia’s 10-year bond yield rose three basis points to 2.69 percent.

Commodities
West Texas Intermediate crude slipped 0.2 percent to $57.06 a barrel. Gold fell 0.1 percent to $1,222.63.

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