(Bloomberg) — Chinese stocks dragged down Asian stocks on the first trading day of the year, following weaker-than-expected factory data and President Xi Jinping’s speech highlighting the headwinds facing the economy.
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Benchmark share gauges in Hong Kong fell as much as 1.5%, while peers on the mainland and Taiwan also fell. According to people familiar with the matter, sentiment also worsened after ASML Holding NV, which manufactures semiconductor manufacturing equipment, suspended shipments of some machinery to China at the request of US President Joe Biden’s administration.
China’s official figures over the weekend showed factory activity contracted to a six-month low in December, while a private manufacturing activity index released on Tuesday showed a slight increase. In his annual televised New Year’s address on Sunday, President Xi pledged to strengthen economic momentum and job creation, but some companies were “struggling” and “people are struggling to find work.” “They found it difficult to meet their basic needs.”
Mark Matthews, head of Asia research at Julius Baer, said the Chinese economy could face another tough year in 2024. “President Xi has made it clear that on the economic front, his priority is to reduce the size of the real estate sector and its importance in the economy,” he said on Bloomberg TV. “The process is painful.”
Oil prices rose after Iran sent warships to the Red Sea after the U.S. Navy destroyed three Houthi ships over the weekend, a move that will further heighten tensions and destroy vital ships vital to global trade. It risks complicating the U.S. government’s goal of securing the waterway.
U.S. stock futures contracts were little changed. The yen weakened against all 10 countries in the group as holiday trading faded as investors closely monitored the situation after Monday’s earthquake in Japan. Dollars were mixed. 10-year government bond futures are down and spot government bonds are closed in Asia due to Japan’s holiday.
Bitcoin has soared above $45,000 for the first time in nearly two years as hopes grew for approval of an exchange-traded fund (ETF) that invests directly in the largest token.
Return to start
After the S&P 500 soared more than $8 trillion last year, there are signs of depletion. Traders have focused on Federal Reserve uncertainty, recession fears and geopolitical risks. And many of us who entered 2023 fearing everything ended up scrambling to chase the bull market.
“The focus in 2024 shifts from the tail risks of recession and inflation in 2023 to the degree of normalization of the relationship between growth, policy and assets,” Stuart Kaiser, head of U.S. equity trading strategist at Citi, said in a note. ” he said. “If that happens, we would be very cautious about initial push buying, but the Fed, which is more concerned about growth, could provide relief sooner than we expected just a month ago. ”
Many investors are currently choosing to take a cautious approach.
“We are very comforted by the fact that the Fed ended tightening without fully considering the level of interest rates that would have a rollover effect when they started raising rates,” said Vishnu Varasan, head of economics and strategy at Mizuho Bank. ” he said. He spoke on Bloomberg TV.
This week’s main events:
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Eurozone S&P World Eurozone Manufacturing PMI, Tuesday
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UK S&P Global UK Manufacturing PMI, Tuesday
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German unemployment rate Wednesday
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US FOMC Minutes, ISM Manufacturing, Recruitment, Light Vehicle Sales, Wednesday
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Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks Wednesday
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China Caixin releases PMI on Thursday
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Eurozone S&P Global Eurozone Services PMI, Thursday
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U.S. new jobless claims, ADP employment, Thursday
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Eurozone CPI, PPI, Friday
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US non-farm payrolls/unemployed, factory orders, ISM services index, Friday
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Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks on Friday
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 11:19 a.m. Tokyo time. The S&P 500 fell 0.3% on Friday.
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Nasdaq 100 futures were little changed.Nasdaq 100 fell 0.4%
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Hong Kong’s Hang Seng Index fell 1.1%.
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China’s Shanghai Composite Index has little change
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Australia’s S&P/ASX 200 index rises 0.2%
currency
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Bloomberg Dollar Spot Index rose 0.1%
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The euro fell 0.1% to $1.1030.
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The Japanese yen fell 0.3% to 141.38 yen to the dollar.
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The offshore yuan was almost unchanged at 7.1272 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6812.
cryptocurrency
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Bitcoin rises 3% to $44,941.11
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Ether rose 1.7% to $2,378.39
bond
merchandise
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West Texas Intermediate crude rose 1.2% to $72.53 per barrel.
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Spot gold rose 0.1% to $2,065.69 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott and Isabel Lee.
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