(Bloomberg) — Asian stocks struggled to find traction on Wednesday while US and European equity futures slumped as a downbeat revenue forecast from Microsoft Corp. added to risk aversion in global markets.
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Contracts for the Nasdaq 100 dropped about 0.8%, following a slight decline in the underlying index on Tuesday. Futures for the S&P 500 also fell, as did those for the Euro Stoxx 50. Japan’s Topix index fluctuated and Australian shares erased early gains as inflation data soured sentiment.
South Korea’s Kospi index surged more than 1% in a catchup move after Lunar New Year holidays. Hong Kong and mainland China markets remain closed.
Microsoft erased gains in post-market trading in the US after warning that revenue growth in its Azure cloud-computing business would decelerate, tarnishing what had been an encouraging profit report.
Treasuries in Asia trading held gains after a rally Tuesday in the US as investors sought havens.
Australian and New Zealand 10-year yields fell more than 10 basis points before reversing the move to trade little changed. The turnaround followed inflation data for the two countries that came in higher than estimates, keeping pressure on their central banks to remain aggressive in fighting inflation.
The data also offer a warning to global investors that peak inflation may not be as near at hand as some expect.
Australia’s dollar advanced and New Zealand’s dollar fell.
Oil rose after a drop on Tuesday and gold inched lower after recent gains that pushed the precious metal to the highest level since April.
US business activity contracted for a seventh month, though at a more moderate pace, while a measure of input prices firmed in a sign of lingering inflationary pressures. S&P Global purchasing managers index data showed a light improvement on prior months although activity remains contractionary.
Microsoft’s news capped a busy day for quarterly corporate profit reports. Homebuilder D.R. Horton Inc. also beat projections, while 3M Co., the maker of Post-it notes, forecast profit that trailed estimates and Texas Instruments Inc., one of the world’s largest chipmakers, suffered its first sales decline since 2020.
Bitcoin fell as much as 2.5% and faced its first two-day drop this year after Microsoft’s outlook dented investor confidence in the cryptocurrency.
The US trading day was marred by a New York Stock Exchange system issue that drove Wells Fargo & Co. sharply down and AT&T Inc. sharply up in the opening seconds of trade before the normal operations returned 20 minutes later. The exchange said some trades would declared “null and void” after the glitch caused hundreds of securities to commence trading without an opening auction price.
The declines for US stocks came on the same day that Jeremy Grantham, the co-founder and long-term investment strategist of GMO, said the S&P 500 could tumble 17% this year.
Key events this week:
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Earnings for the week include: Abbott Laboratories, ASML Holding, AT&T, Boeing, International Business Machines, NextEra Energy, Tesla (Wednesday); American Airlines, Blackstone, Comcast, Diageo, Intel, LVMH Moet Hennessy Louis Vuitton, Mastercard, SAP, Southwest Airlines, Visa (Thursday); American Express, Charter Communications, Chevron, HCA Healthcare (Friday)
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US MBA mortgage applications, Philadelphia Fed non-manufacturing activity, Wednesday
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US fourth-quarter GDP, new home sales, initial jobless claims, Thursday
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US personal income/spending, PCE deflator, University of Michigan consumer sentiment, pending home sales, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.4% as of 12:03 p.m. Tokyo time. The S&P 500 fell 0.1%
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Nasdaq 100 futures fell 0.8%. The Nasdaq 100 fell 0.2%
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Japan’s Topix rose 0.2%
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Australia’s S&P/ASX 200 fell 0.2%
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Euro Stoxx 50 futures fell 0.2%
Currencies
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Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0896
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The Japanese yen fell 0.1% to 130.31 per dollar
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The Australian dollar rose 0.7% to $0.7096
Cryptocurrencies
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Bitcoin fell 1.5% to $22,563.62
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Ethereum fell 3.6% to $1541.983
Bonds
Commodities
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West Texas Intermediate crude rose 0.3% to $80.38 a barrel
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Spot gold fell 0.2% to $1,933.99 an ounce
This story was produced with the assistance of Bloomberg Automation.
(An earlier version of this wrap corrected the description for Jeremy Grantham.)
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