Asian Stocks Start Week Lower
Asian stocks fell on Monday, after a sell-off on Wall Street caused by dismal economic data and corporate profits. Oil prices have also fallen.
Photo Insert: The Hang Seng index in Hong Kong fell 1.2 percent to 20,365.99.
Investors are looking forward to the next move by the US Federal Reserve, which is likely to raise its key interest rate again on Wednesday in order to combat inflation, according to Elaine Kurtenbach of the Associated Press (AP) on July 25, 2022.
The Fed is expected to announce its second 0.75 percent point hike in short-term interest rates in a row, a significant increase not seen since 1994. The Fed's target rate will thereafter be in the 2.25 percent to 2.5 percent range, the highest level since 2018. The US economy is slowing, but solid hiring indicates that it is not yet in recession, according to Treasury Secretary Janet Yellen on NBC's "Meet the Press" on Sunday.
She spoke ahead of a raft of economic statistics due out this week that would shed insight on an economy beleaguered by runaway inflation as interest rates rise.
The most important report will most likely be released on Thursday, when the Commerce Department releases its first estimate of the economy's output in the April-June quarter. Some experts believe it will contract for the second quarter in a row. In the January-March quarter, the economy shrunk by 1.6 percent.
Two consecutive negative readings are considered an informal definition of a recession, although economists believe that is misleading in this case.
On Monday in Asia, the Nikkei 225 in Tokyo dropped 0.9 percent to 27,676.97, while the Kospi in Seoul fell 0.6 percent to 2,406.98. The Hang Seng index in Hong Kong fell 1.2 percent to 20,365.99, while the Shanghai Composite index fell 0.8 percent to 3,245.19. In Australia, the S&P/ASX 200 fell 0.2 percent to 6,781.60.
On Friday, the S&P 500 fell 0.9 percent to 3,961.63, snapping a three-day run that had pushed it to its highest level in six weeks. The Dow Jones Industrial Average fell 0.4% to 31,899.29. It fared better when American Express reported positive results and stated its cardholders were spending more.
The Nasdaq fell 1.9 percent to 11,834.11 after Snap, Seagate Technology, and other technology companies reported lower-than-expected earnings. The business behind the Snapchat app fell 39.1 percent after reporting a greater loss and lower sales for the spring than expected by Wall Street.