Asian stocks were mostly higher after advancing on Wall Street on Thursday, which completed a three-day losing streak. Hong Kong, Tokyo, and Shanghai gain; Seoul came down. Oil prices dropped, and U.S. futures have risen. Investors seem to have shunned new evidence that inflation is still prevalent in the U.S. economy in a U.S. government report; That the rise in energy costs led to wholesale prices rising by a record 11.2% last month compared to the previous year.
This report came a day after the department said that consumer prices remain at the highest for generations. Rising prices are pushing the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help reduce the growing demand that contributes to the problem.
The Bank of South Korea raised its benchmark interest rate to 1.50% by 25 percentage points. This was its fourth increase since August 2021. Kospi fell 0.1% to 2,714.44. Singapore shares fell; After the Singaporean monetary authority tightened its policy by adjusting the exchange rate, it took a more aggressive step than expected. It also raised its 2022 inflation forecast from 2.5% -3.5% to 2.0% -3.0%. The Bank of New Zealand raised its benchmark interest rate on Wednesday.
The Nikkei 225 index rose 1.3% to a total of 27,182.50. The S&P/ASX 200 gain 0.5% to 7.515.60. Hang Seng increased 0.4% to 21,448.61. The Shanghai Composite Index grew 0.7% to 3,207.85. Due to reports that the People’s Bank of China may ease the policy of pandemic closure in large cities.
Stocks and Inflation
It has been reported that China will reduce its banks’ reserve requirement ratio; Or use other policy tools “at the appropriate time.” U.S. stock and bond markets are facing a reduced week and will close. On Wednesday, the S&P 500 index rose 1.1% to close at 4,446.59; breaking a 3-day losing line caused by the frequent anxiety about inflation; also the grim medication that the Fed schedules to use against it.
The Dow rose 1% to a total of 34,564.59. Nasdaq up 2% to 13,643.59. Shares of small companies surpassed the broad market as a sign that investors were confident in economic growth. Russell 2000 index surged 1.9% to 2,025.10 and is on a path for a weekly gain.
Travel-related companies were one of the most significant profits. Delta won 6.2%. After It announced strong earnings in the first quarter and solid bookings. American Airlines jumped 10.6%. United Airlines and Southwest won the seat. Carnival and Royal Caribbean, together with Expedia Group, made a substantial profit. Technology stocks have also risen.
Banks shrank after a disappointing JPMorgan revenue report. It fell 3.2% after showing a sharp drop in earnings after writing off nearly $1.5 billion in assets; Due to higher inflation and the Russia-Ukraine war. Bond yields fell. 10-year treasury yields fell to 2.68% on Thursday. Inflation may reach a peak, but it is likely to stay for some time as cost pressures filter their way into markets.
Russia-Ukraine war caused energy prices to vary. Oil supply was already scarce as demand increased with the pandemic shrinking. U.S. crude oil prices have risen about 40% year on year. This raises gasoline prices and puts a more significant blow on people’s wallets.
Companies in different industries are raising prices to offset rising costs and to maintain or increase their margins. Internet retail giant Amazon has said it would add a 5% fuel and inflation tax, which pays third-party sellers who use retail services; Because the company is facing rising costs. Investors will get more details on how companies and consumers deal with inflation. More companies are announcing their latest financial results. UnitedHealth Group, Wells Fargo, and Citigroup will report their earnings on Thursday.
The Commerce Department will release a retail sales report for March that shows whether consumers are reversing costs. US crude oil fell to $103.89 a barrel, or 35 cents, on the New York Mercantile Exchange. It rose from $3.65 to $104.25 a barrel on Wednesday. International Oil Price Standard Brent oil lost 28 cents; The total was $108.50 per barrel. The US dollar fell to 125.22 against the Japanese yen. The euro increased to $1.0906.
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