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Asian markets are falling after grim US GDP data



Asian stocks fell on Friday as reports show that layoffs remain high after the US economy contracted by almost 33% a year in the spring, the worst quarter on record.

Revenue reports, an indicator of how well businesses are managing the decline of the coronavirus pandemic, have contributed to the gloom. Some technology companies have broken this trend and are showing positive results. However, many companies hurt.

Japanese Nikkei 225 NIK,
-2.34%
decreased by 2.3%, while the Hong Kong Hang Seng HSI index,
+ 0.16%
increased by 0.2%. Shanghai composite SHCOMP,
+ 0.29%
was about flat, while the Shenzhen Composite 399106 with a smaller cap,
+ 0.79%
gained 0.3%. South Korea, Kospi 180721,
-0.15%
slipped by 0.2%, Taiwanese Taiex Y9999,
-0.02%
decreased by 0.3% and the Australian S & P / ASX 200 XJO,
-1.75%
decreased by 1.6%. Markets in Singapore, Malaysia and Indonesia were closed during the holidays.

August tends to be a miserable month for stocks, noted Stephen Innes of AxiTrader Corp.

“The stock markets look extremely fair if we could get into a kickback phase when we go to August, most often referred to as summer swelling,” Innes said in a comment.

In one positive signal, China announced that its manufacturing activity increased in July and export orders strengthened despite weak US and European demand. The monthly survey released on Friday was another sign that the world’s second largest economy is gradually recovering from a coronavirus pandemic.

Meetings of central banks for various countries are on the agenda next week.

“GDP in Indonesia and the Philippines in the second quarter will also examine in detail and highlight the impact of the pandemic,” said Bernard Aw, chief economist at IHS Markit in Singapore.

The Japanese government said that by the end of Thursday, the national economy is likely to shrink by 4.5% for the fiscal year ending March 2021. It expects a return to growth in the next fiscal year.

Among Japanese companies that will report profits next week are Sony Corp. 6758
-0.99%
, Honda Motor Co. 7267.
-4.46%
, Toyota Motor Corp. 7203
-2.54%
and Nintendo Co. 7203
-2.54%.

Some companies hold up better than others.

Japanese media reports said Toyota was once again set to become the world’s number one automotive industry and overtake Volkswagen, which is currently the world’s largest carmaker. Toyota sales have already recovered in markets such as China, which the company says is recovering from its first outbreaks of COVID-19.

The US spent the night in April-June, when the spread of pandemics stopped, when the economy fell to a record 32.9% annual rate in April-June.

Reports of a deep steep collapse have emerged as a result of the resurgence of outbreaks that have prompted businesses in many areas to close for a second time. The government’s estimate of a decline in gross domestic product in the second quarter has not been recorded since records began in 1947. The previous worst quarterly declines – 10%, less than a third of what was announced on Thursday – occurred in 1958 during the Eisenhower report . .

The bad news was not a big surprise and on the Wall Street S&P 500 SPX,
-0.37%
decreased by 0.4% to 3,246.22. Almost three of the four stocks in the index fell. Among those most affected were oil producers, banks and other companies most in need of the economy to escape the recession.

The Dow Jones Industrial Average DJIA,
-0.85%
lost 0.9% to 26,313.65.

The shares appeared to be set for a much sharper decline earlier in the day, but stronger-than-expected gains reported by UPS and other companies helped the market cut back on losses. The prices of Amazon and other large technology-oriented stocks, which showed their own results after the end of daily trading, also stabilized.

Expectations of their reports, which turned out to be even better than expected on Wall Street, helped the Nasdaq composite COMP,
+ 0.42%
completely erase your early losses and climb 0.4% to 10,587.81.

Overall, however, revenue reports were well below the level a year ago before the pandemic. According to the FactSet report, large companies in the S&P 500 group reported a decline of almost 38% in the second quarter compared to the previous year.

Shortly after trading ended, Amazon AMZN,
+ 0.60%
, Apple AAPL,
+ 1.21%
, Facebook FB,
+ 0.51%
and the parent company Google Alphabet GOOGL,
+ 0.97%
GOOG,
+ 0.62%
all reported higher gains in the last quarter than Wall Street predicted. Investors are still flocking, expecting them to thrive as the pandemic accelerates the shift toward online commerce.

Benchmark US raw CLU20,
+ 0.55%
earned 14 cents to $ 40.06 a barrel in e-commerce on the New York Mercantile Exchange. Brent raw BRNU20,
+ 0.46%
, the international standard, rose 37 cents to $ 43.31 a barrel.

USDJPY Dollar,
-0.44%
slipped to 104.22 Japanese yen from 104.73 yen.


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