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Asian Stocks Down, Investors Digest U.S. Positive Economic Data

Stock MarketsJun 03, 2021 10:46PM ET
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By Gina Lee – Asia Pacific stocks were mostly down Friday morning, ending the week on a down note. The release of positive U.S. employment data raised concerns about a slowdown of central bank stimulus measures, with investors now awaiting further data to be released later in the day.

Japan’s Nikkei 225 fell 0.51% by 10:37 PM ET (2:37 AM GMT). Household spending increased 0.1% month-on-month and 13% year-on-year in April, according to data released earlier in the day.

South Korea’s KOSPI fell 0.41%.

In Australia, the ASX 200 inched up 0.06%, with home loans data released earlier in the day.

Hong Kong’s Hang Seng Index edged up 0.12%. China’s Shanghai Composite was down 0.27% and the Shenzhen Component fell 0.31%.

In the U.S., data released on Thursday said initial jobless claims fell to 385,000 in the previous week, lower than the 390,000 claims in forecasts prepared by and the 405,000 claims filed during the previous week. The number of claims also posted a fifth consecutive week of declines to a record low not seen since the start of the COVID-19 pandemic.

Investors now await the non-farm payrolls data in May, due later in the day, which could lead to volatility should it deviate from expectations. St. Louis U.S. Federal Reserve President James Bullard said the labor market might be worse than the current unemployment rate forecasts.

“With seemingly all systems go on the jobs front, the economy is flashing some very real signs that this isn’t just a comeback, expansion mode could be on the horizon,” Mike Loewengart, managing director of investment strategy at E*Trade Financial (NASDAQ:ETFC), told Bloomberg.

“So what does that translate to? Likely more pressure on the Fed to make a move, perhaps sooner than many thought from the outset.”

Investors remain concerned that the price pressure will force the Fed to change the course of its current dovish monetary policy although some officials repeatedly stated that any inflation will be transitory and the central bank will keep its current policy unchanged for a while.

New York Fed President John Williams (NYSE:WMB) said on Thursday that the U.S. economic recovery from COVID-19 is far from the level at which the Fed might start to scale back its support for businesses, but added the central bank needs to start talking about a tapering of stimulus measures.

Other officials have also joined Williams in reiterating the need to start tapering discussions.

Investors will also be monitoring China’s response to an order signed by U.S. President Joe Biden on Jun 3. In the order, Biden amended a ban on U.S. investment into Chinese companies and named 59 firms with ties to China’s military or surveillance industries. Some of the affected companies include Huawei, China Mobile Ltd. (HK:0941), China Unicom (NYSE:CHU) and China Telecommunications Corp.

The order will take effect on Aug. 2 at 12:01 a.m. in New York, and investors will be given one year to fully divest any stakes.

Asian Stocks Down, Investors Digest U.S. Positive Economic Data

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