Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Asian Stocks Down as Investors Brace for Hawkish Fed

Stock MarketsJan 24, 2022 10:58
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Monday morning, with a potentially tighter U.S. Federal Reserve monetary policy weighing on sentiment. Investors also digested inflation data from Japan and Australia.

Japan’s Nikkei 225 was down 0.45% by 9:08 PM ET (2:08 AM GMT). The country’s manufacturing purchasing managers index (PMI) for January was 54.6, and the country also released its services PMI.

South Korea’s KOSPI slid 1.63%.

In Australia, the ASX 200 was down 0.39%. Australia released its own manufacturing and services PMIs, which were at 55.3 and 45, respectively. The consumer price index is due on Tuesday.

Hong Kong’s Hang Seng Index was fell 1.26%.

China’s Shanghai Composite was down 0.58% while the Shenzhen Component inched up 0.09%. Yu Yongding, a former member of the monetary policy committee of the People’s Bank of China, warned more government spending is needed to drive economic recovery as a looser monetary policy will not be enough.

With the past week being one of the worst for global shares since the onset of the COVID-19 pandemic, investors now await the Fed’s latest policy decision, which will be handed down on Wednesday. A key question is how a more hawkish Fed will impact fixed income, with U.S. Treasuries rallying after an initial fall at the beginning of the previous week. The benchmark 10-year yield inched up toward 1.77%.

There is also the risk that the Fed will tighten monetary policy more aggressively in 2022 than expected, Goldman Sachs Group Inc. economists warned.

The Bank of Canada will also hand down its policy decision on the same day.

Investors also await earnings reports throughout the week from companies including Apple Inc. (NASDAQ:AAPL), Boeing Co . (NYSE:BA), General Electric Company (NYSE:GE), 3M Company (NYSE:MMM), Deutsche Bank AG (NYSE:DB) NA O.N. (DE:DBKGn), Microsoft Corporation (NASDAQ:MSFT), Samsung Electronics (OTC:SSNLF) Co. Ltd. (KS:005930), and Tesla Inc. (NASDAQ:TSLA)

There is “likely a longer-term rotation toward value stocks measured in quarters, not weeks” unfolding, Evercore ISI chief equity and quantitative strategist Julian Emanuel said in a note.

“Investors should retain a balanced view, staying patient in committing new capital to equities.” n 

A less accommodative Fed is also among the reasons why “you have a re-rating going on and certainly a bit of a, excuse the term, puking of some of the higher-spec, lower-quality segments of the market,” Charles Schwab (NYSE:SCHW) & Co. chief investment strategist Liz Ann Sonders told Bloomberg.

Meanwhile, U.S.-Russia tensions over Ukraine are also on the radar, with the U.S. ordering family members at its embassy in Kyiv to leave Ukraine.

On the data front, the U.S.’ fourth-quarter GDP, pending home sales and core durable goods orders are due on Thursday.

Asian Stocks Down as Investors Brace for Hawkish Fed
 

Related Articles

Uncertainty Ahead for JD.com, Says Morgan Stanley
Uncertainty Ahead for JD.com, Says Morgan Stanley By Investing.com - May 19, 2022

By Sam Boughedda Investing.com -- Morgan Stanley analyst Eddy Wang reiterated an Overweight rating and $80 price target on Chinese e-commerce company JD.com Inc (NASDAQ:JD)...

AMC Slips After Taking Stake in Cinema Ad Company
AMC Slips After Taking Stake in Cinema Ad Company By Investing.com - May 19, 2022

By Liz Moyer Investing.com -- AMC Entertainment Holdings Inc (NYSE:AMC) shares slipped 1.6% after disclosing it acquired a 6.8% stake in National CineMedia. Shares of National...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email