New York returned from holiday in a sombre mood overnight, as the US Non-Farm Payrolls data heightened fears that the US recovery is running out of momentum. With the US debt ceiling and the passage giant infra-structure bill to come later in the month, those concerns may be well-founded. There are plenty of potential banana skins this month, including an FOMC meeting.
US markets rotated into the perceived safety of big-tech overnight, which pushed the S&P 500 and Dow Jones lower, while the Nasdaq held steady. The S&P 500 fell 0.34%, the Nasdaq finished just 0.07% higher, and the Dow Jones retreated by 0.76%, with growth and value taking a beating. US index futures have staged a modest comeback today, rising by around 0.10%.
In Asia, the uninspiring Wall Street performance and falling commodity prices are weighing on Asian markets. The exception being Japan and China, where stimulus hopes are alive and well and keeping the music playing. That sees the Nikkei 225 rising 0.70% today, even as the Kospi falls by 0.50%. In China, the Shanghai Composite is 0.10% higher, while the CSI 300 has risen by 0.30%, with the Hang Seng flat. China markets have given back most of their early gains, so it could be that the New York malaise is having a delayed impact after China has rallied impressively this week.
Singapore has retreated by 0.70%, with Taipei 0.30% lower. Kuala Lumpur has managed to book a 0.30% gain, but Jakarta has fallen by 0.25%. A negative New York lead and lower overnight commodity prices are weighing on Australian markets. The ASX 200 and All Ordinaries are 0.30% lower.
With sentiment shifting back and forth intra-day at the moment, the noise in Asia is unlikely to weigh on European markets, which I expect to open modestly higher this afternoon, after what was, despite the noise, just a modestly corrective US session.
