(Bloomberg) — European and U.S. stock futures fell after weakness in Asian markets, with Meta Platforms Inc.’s disappointing outlook underscoring the risk of volatility in a week of risky gains.
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The Euro Stoxx 50 contract fell 0.2%, while S&P 500 futures fell 0.8%. In South Korea and Japan, equity benchmarks fell more than 1%. Facebook parent Meta slumped 15% in after-hours US trading as it forecast second-quarter revenue below analysts’ expectations and raised spending estimates for the year.
In addition to earnings, traders will also be closely watching U.S. economic growth numbers and the Federal Reserve’s preferred inflation gauge due this week to firm up their policy expectations. The markets have been reducing interest rate cuts expected from the Fed for weeks. Economists polled by Bloomberg said GDP likely cooled to around 2.5% in the first quarter, with the numbers potentially still pointing to ongoing inflationary pressures.
The yen extended losses after falling above 155 per dollar on Wednesday for the first time in more than three decades, raising the likelihood of intervention ahead of the Bank of Japan’s monetary policy decision on Friday.
“Meta’s not-so-optimistic outlook has left markets looking for cover in the after-hours session, which will also immediately spill over into caution in Asian markets, which are already “higher in the longer term” due to US Federal Reserve jitters jitters in China will be affected,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank in Singapore.
The yen depreciated to as much as 155.74 per dollar on Thursday, a new 34-year low against the dollar. The BOJ is expected to leave its interest rates unchanged on Friday, while the currency collapse makes it more likely that the bank will soften its stance on maintaining easy monetary policy.
“Ueda’s press conference is expected to strike a hawkish tone, and even if the yen’s depreciation does not accelerate, the government is likely to intervene at the same time and boost the yen by about 5 yen more,” said Eiji Dohke, a strategist at SBI Securities. The initial intervention would likely involve trillions of yen, followed by smaller long-term purchases, he said.
Also read: UBS analyst who covered Evergrande is now bullish on real estate in China
Asian government bonds were little changed after yields rose in the previous session. Investors enjoyed a $70 billion sale of five-year Treasury bonds on Wednesday at a slightly higher yield than expected, after even stronger demand for the two-year Treasury auction on Tuesday.
Elsewhere in Asia, stocks in Hong Kong performed better due to increased buying by Chinese investors. Mainland traders have made a net purchase of $20 billion in Hong Kong stocks since March, putting the market on track for its biggest two-month inflow since 2021, BNP strategists including Jason Lui said in a note.
Meanwhile, Secretary of State Antony Blinken said the world’s largest economies needed to “state our differences” as he began two days of talks in China, while his visit raised the threat of U.S. sanctions against Beijing over its support for Russia’s war in Ukraine .
Also read: UBS analyst who covered Evergrande is now bullish on real estate in China
In the corporate world, shares of South Korea’s SK Hynix Inc. plunged even after the company said it expects a full recovery in the memory market, as AI demand spurred the chipmaker to its fastest sales growth since at least 2010.
The stock was “sold on the news after its big rise on Wednesday – and Meta’s 15% decline is also dampening investor sentiment,” said Marcello Seongsoo Ahn, portfolio manager at Quad Investment Management Co. in Seoul.
BHP Group Ltd. Anglo American Plc has launched a takeover bid that could trigger the biggest shakeup of the global mining industry in over a decade.
Elsewhere, gold posted a three-day decline. Oil prices fell slightly, with risk-off sentiment in broader markets counteracting a decline in US inventories.
Important events this week:
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US GDP, wholesale inventories, initial jobless claims, Thursday
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Microsoft, Alphabet, Airbus results Thursday
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Interest rate decision in Japan, CPI in Tokyo, inflation and GDP forecasts, Friday
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US personal income and spending, PCE deflator, consumer sentiment at the University of Michigan, Friday
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Exxon Mobil, Chevron results, Friday
Some of the key moves in the markets:
Shares
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S&P 500 futures fell 0.7% at 6:33 a.m. London time
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Nikkei 225 futures (OSE) fell 2.1%
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S&P/ASX 200 futures fell 0.8%
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Japan’s Topix fell 1.7%
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Hong Kong’s Hang Seng rose 0.4%
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The Shanghai Composite rose 0.2%
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Euro Stoxx 50 futures fell 0.2%
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Nasdaq 100 futures fell 1.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0709
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The Japanese yen fell 0.2% to 155.73 per dollar
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The offshore yuan was little changed at 7.2687 per dollar
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The Australian dollar rose 0.2% to $0.6509
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The British pound was little changed at $1.2470
Cryptocurrencies
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Bitcoin rose 0.2% to $64,184.01
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Ether rose 0.8% to $3,155.96
Tie up
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The yield on 10-year government bonds remained little changed at 4.65%
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Japan’s 10-year yield was unchanged at 0.895%
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Australia’s 10-year yield rose 14 basis points to 4.41%
raw materials
This story was produced with support from Bloomberg Automation.
– With assistance from Stephen Kirkland, Youkyung Lee, Masaki Kondo and Tania Chen.
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