SHANGHAI, Jan 20 —This is a roundup of global macroeconomic news last night and what is expected today.
The dollar rose broadly on Thursday as growth concerns about the U.S. economy drove demand for the safe-haven greenback, while the yen renewed its ascent as investors doubled down on bets that the Bank of Japan would shift away from its yield curve control policy.
Weak U.S. data released on Wednesday showed that U.S. retail sales fell by the most in a year in December and manufacturing output recorded its biggest drop in nearly two years, stoking fears that the world’s largest economy is headed for a recession.
The fresh wave of risk aversion - compounded by news of job cuts by tech giants Microsoft and Amazon - also kept the dollar in bid.
However, the greenback failed to eke out a gain against the Japanese yen and was last 0.4% lower at 128.42 yen, unwinding most of its previous day’s rally in the immediate aftermath of the BOJ’s decision to stand pat on its ultra-loose monetary policy.
Stock futures ticked higher on Thursday as investors tried to hang onto the January rally amid worries about monetary policy and slowing earnings.
Futures tied to the Dow Jones Industrial Average rose 11 points, or 0.03%. S&P 500 and Nasdaq 100 futures gained 0.09% and 0.27%, respectively. Nordstrom slipped more than 5% in after hours trading after reporting weak holiday sales and cutting its year-end forecast. Netflix jumped 7% after reporting more subscribers than expected even though its quarterly earnings missed analysts’ estimates.
During Thursday’s session, the Dow and the S&P 500 both closed lower to hit their third negative days in a row as corporate earnings and economic data signal a slowing economy. The Dow slipped more than 252 points, or 0.76% and is now down 0.31% year to date. The S&P 500 shed 0.76% and the Nasdaq Composite lost 0.96%, but both indexes are positive for the year.
For the week, however, all three indexes are on track to close lower. The Dow is down 3.67%, on track for its worst week since September. The S&P 500 is down more than 2.5% and could notch its worst weekly performance since December. The Nasdaq is down more than 2% and on pace to break a two-week win streak.
Oil prices settled 1% higher on Thursday, extending a recent rally built around rising Chinese demand, while the market wrote off a second straight week of large builds in U.S. crude inventories.
Brent crude futures gained $1.18, or 1.4%, to settle at $86.16 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 85 cents, or 1.1%, to settle at $80.33 per barrel. Those were the highest closing levels for both contracts since Dec. 1.
Chinese oil demand climbed by nearly 1 million barrels per day (bpd) from the previous month to 15.41 million bpd in November, the highest level since February, according to the latest export figures published by the Joint Organisations Data Initiative.
Gold prices rose nearly 1% on Thursday, supported by a weaker dollar and some safe-haven demand as weak U.S. economic readings and hawkish comments from Federal Reserve officials fueled recession worries.
Spot gold was last up 1.5% to $1,932.40 per ounce. U.S. gold futures rose 1.41% to $1,933.90.
European markets retreated on Thursday, tracking weaker global sentiment as investors gauge the economic outlook, a topic high on the agenda at the World Economic Forum in Davos this week.
The pan-European Stoxx 600 closed down 1.6%, with tech stocks shedding 2.9% to lead losses as all sectors and major bourses finished in the red.