Asian stocks set to fall as China troubles worsen: Markets close

(Bloomberg) — Asian shares are poised to fall early Monday as concerns about the health of the Chinese economy grow. US stock futures were flat.

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Contracts in Australia, Hong Kong and mainland China point to an anticipated loss at Monday’s open, while moves in Asia may be exacerbated by thin liquidity as Japanese markets are closed for the holiday. The S&P 500 ended 0.2 percent lower on Friday after quarterly options expired.

Data late on Friday showed Chinese governments cut spending, while the youth unemployment rate climbed to its highest level this year as domestic banks refrained from cutting lending rates. Adding to the weak sentiment, the US is said to be planning rules that would ban Chinese hardware and software for connected vehicles from Monday.

“Things are going from bad to worse in China,” said Tony Sycamore, an analyst at IG in Sydney. “With Japanese stock markets closed for a bank holiday, the PBOC disappointing on Friday and US yields rising, we are likely to see a more dovish tone in Asian equity markets today.”

Broadly speaking, markets are gearing up for the final quarter after the Federal Reserve began its long-awaited interest rate cut cycle last week, lifting everything from Indonesian bonds to gold. This week’s data, including the Fed’s preferred measure of inflation, should confirm whether growth will expand, with a deterioration likely to raise the odds of a further 50 basis point cut.

After swinging between gains and losses in the final minutes of trading on Friday, the S&P 500 and Nasdaq 100 both closed lower, with the broader benchmark fresh off its 39th record high since 2024. The industrial average The Dow Jones hit a new record high. More than 20 billion shares changed hands on US exchanges, the busiest session since January 2021.

Intel Corp. was among the promoters of the session after reports of a bid by Qualcomm Inc. Stocks could extend gains in U.S. trading after it was reported that Apollo Global Management Inc. has offered to make an equity-like investment of up to $5 billion in the chip maker. .

Gold ended above $2,600 an ounce on Friday, extending gains after an Israeli strike on a Beirut suburb. The precious metal and oil were steady in early trade as Hezbollah launched retaliatory attacks across large swaths of northern Israel after last week’s blasts of pagers and other electronic devices that killed at least 39 people in Lebanon.

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The dollar was little changed compared to the major early months. Cash trading in US Treasuries was closed in Asia due to the holiday in Japan. Australian bonds fell ahead of the central bank’s likely extension of a policy break on Tuesday as housing costs prop up sticky inflation.

“Our Aussie economics team expects RBA comments to be hawkish, albeit slightly less hawkish than in August, helping to guide the Australian dollar higher,” Commonwealth Bank of Australia strategists including Joseph Capurso wrote in a note to customers. “It has to go well enough for the RBA to cut the cash rate this year; the risk is a delay until early 2025.”

Elsewhere this week, factory activity and consumer confidence readings in Europe are due, while Australia and Tokyo are due to release inflation data. A number of Fed speakers are scheduled to release economic data, including the US personal consumption expenditure indicator and jobless claims.

Key events this week:

• CPI Malaysia, Monday

• Eurozone HCOB Manufacturing PMI, HCOB Services PMI, Monday

• UK S&P Global Manufacturing PMI, S&P Global Services PMI, Monday

• Australia’s rate decision on Tuesday

• Japan Jibun Bank Manufacturing PMI, Services PMI, Tuesday

• Mexico CPI, Tuesday

• Bank of Canada Governor Tiff Macklem speaks on Tuesday

• CPI Australia, Wednesday

• China’s medium-term lending facility rate on Wednesday

• Sweden’s rate decision on Wednesday

• Switzerland tariff decision on Thursday

• ECB President Christine Lagarde speaks on Thursday

• US Jobless Claims, Durable Goods, GDP Revised Thursday

• Fed Chairman Jerome Powell delivered pre-recorded remarks at the 10th annual US Treasury market conference on Thursday

• Rate decision Mexico, Thursday

• Japan Tokyo CPI, Friday

• Industrial profits in China on Friday

• Eurozone consumer confidence, Friday

• US PCE, University of Michigan, Consumer Sentiment, Friday

Some of the main movements in the markets:

Stocks

• S&P 500 futures were little changed as of 8:23 a.m. Tokyo time

• Hang Seng futures fell 0.5%

• S&P/ASX 200 futures down 0.8%

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1163

• The Japanese yen was little changed at 143.82 per dollar

• The offshore yuan was little changed at 7.0442 per dollar

• The Australian dollar was little changed at $0.6806

Cryptocurrencies

• Bitcoin rose 0.4% to $63,486.59

• Ether rose 0.1% to $2,576.21

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This story was produced with the help of Bloomberg Automation.

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