(Bloomberg) — Asian stocks look set for a mixed start Tuesday as traders digest an early selloff in US equity futures and more Chinese measures to boost the world’s second-largest economy.
US futures dropped with Nasdaq 100 contracts faring worst after Snapchat owner Snap Inc. warned of deteriorating macreconomic trends and said it’s unlikely to meet revenue and profit forecasts for the second quarter. Social media heavyweight Meta Platforms Inc. fell in postmarket trading, while internet search giant Alphabet Inc. dropped.
Futures slipped in Japan. US shares had closed higher, helped by President Joe Biden’s comments that China tariffs imposed by the Trump administration are being reviewed. Financials and energy stocks led gains.
China will offer more than 140 billion yuan ($21 billion) in additional tax relief as it seeks to offset the impact of coronavirus lockdowns that have battered the economy. Chinese stocks traded in the US retreated.
The dollar and bonds fell. The euro held onto gains after European Central Bank Chief Christine Lagarde said higher interest rates are coming in July.
Equities have been volatile as investors assess the outlook for monetary policy, inflation and the impact of China’s strict Covid policies on the global economy. Minutes of the most recent Federal Reserve rate-setting meeting will give markets insight this week into the US central bank’s tightening path.
“That is a big risk that the Fed doesn’t get the big economy signals and keep marching along with a very aggressive tightening program,” Margaret Patel, senior portfolio manager at Allspring Global Investments, said on Bloomberg Television. “But if they look at the real world out there they will see it’s time to take a big pause and at that point we will evaluate the market and perhaps try to see to a way through without a recession.”
Elsewhere, JPMorgan Chase & Co.’s chief Jamie Dimon said “storm clouds” over the US economy may dissipate.
Geopolitics will be closely watched after comments by Biden on Taiwan threatened to raise tensions with Beijing.
In Europe, Russia’s blockade of Ukraine’s ports is a “declaration of war” that threatens to trigger mass migration and a global food crisis, a United Nations official said, adding to the dire warnings on the opening day of the World Economic Forum in Davos.
Here are some key events to watch this week:
- Eurozone S&P Global PMIs Tuesday
- US new home sales, S&P Global PMIs Tuesday
- Reserve Bank of New Zealand rate decision Wednesday
- FOMC minutes Wednesday
- ECB publishes its Financial Stability Review Wednesday
- Bank of Korea rate decision Thursday
- US GDP, initial jobless claims Thursday
- US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.9% at 7:20 a.m. in Tokyo. The S&P 500 rose 1.9% Monday
- Nasdaq 100 futures fell 1.6%. The Nasdaq 100 rose 1.7% Monday
- Nikkei 225 futures fell 0.6%
Currencies
- The Bloomberg Dollar Spot Index fell 0.7%
- The Japanese yen was little changed at 127.90 per dollar
- The offshore yuan was at 6.6603 per dollar
- The euro was at $1.0692
Bonds
Commodities
- West Texas Intermediate crude fell 0.2% to $110.02 a barrel
- Gold was at $1,853.59 an ounce
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