Global stocks fell Thursday in the wake of a selloff on Wall Street, after cautious comments from Federal Reserve Chairman Jerome Powell added to concerns about the global economy.
The pan-continental Stoxx Europe 600 dropped 0.8%, while futures tied to the S&P 500 were broadly flat.
In afternoon trading in Hong Kong, the Hang Seng Index and Nikkei 225 both dropped 1.3%. Benchmarks in South Korea and Australia declined around 1% each, while the Shanghai Composite retreated 0.7%.
The Dow Jones Industrial Average dropped 2.2% Wednesday, after Mr. Powell said further stimulus could be needed to support the U.S. economy’s recovery from its coronavirus-induced contraction.
Dwyfor Evans, head of macro strategy for Asia-Pacific at State Street Global Markets, said markets were weighed down by Mr. Powell’s “extremely negative” remarks, and the Fed chairman was effectively “crying out for political assistance” in the form of greater government spending.
On Wednesday Mr. Powell warned that, with company revenues depressed for longer, waves of business bankruptcies could follow, risking a much slower pace of improvement in the job market.
Mr. Evans at State Street said renewed trade tensions were also concerning, and if they picked up could lead to U.S. investors bringing back some capital invested abroad.
The Trump administration recently told a federal retirement plan to avoid Chinese stocks, while the Global Times, a Communist Party-run newspaper, said that Beijing was exploring punitive countermeasures to U.S. lawsuits seeking damages from China for the pandemic.
Fed Chairman Jerome Powell at a briefing earlier this year. On Wednesday, Mr. Powell urged the White House and Congress to spend more money to battle the economic downturn.
Photo: eric baradat/Agence France-Presse/Getty ImagesThomas Poullaouec, Asia-Pacific head of multiasset solutions at T. Rowe Price, said U.S. debate about rebalancing economic relations with China would likely increase as November’s presidential election approached. However, he said he didn’t expect concrete actions given the economic backdrop, and so the trade issues would probably only increase volatility, rather than pull markets lower.
State Street’s Mr. Evans said the Chinese government’s annual legislative meetings, set to start on May 22, could give markets in Asia a lift.
He said Beijing could offset weak exports by cutting taxes and levies to encourage domestic consumption, helping boost China’s economic recovery from the coronavirus. “China should be leading the global economy out of this. We think of it very much as first into the crisis, first out of the crisis,” he said.
The yield on the 10-year Treasury fell to 0.627%, from 0.648% Wednesday.
Write to Joanne Chiu at joanne.chiu@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"stock" - Google News
May 14, 2020 at 02:38PM
https://ift.tt/2AuDYS9
Global Stocks Follow Wall Street Lower - The Wall Street Journal
"stock" - Google News
https://ift.tt/37YwtPr
https://ift.tt/3b37xGF
Bagikan Berita Ini
0 Response to "Global Stocks Follow Wall Street Lower - The Wall Street Journal"
Post a Comment