Asian shares slip as investors eye inflation, earnings

Jul 17, 2022, 8:18 AM | Updated: Jul 18, 2022, 9:23 pm
People wearing face masks walk past a bank's electronic board showing the Hong Kong share index in ...

People wearing face masks walk past a bank's electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 19, 2022. Asian shares were mixed Tuesday, as investors weighed oil prices, inflation worries and corporate earnings. Benchmarks in Tokyo and Shanghai were higher in morning trading. Shares fell in Sydney, South Korea and Hong Kong, where investor sentiments were subdued after an early rally evaporated on Wall Street. (AP Photo/Kin Cheung)

(AP Photo/Kin Cheung)

TOKYO (AP) — Asian shares were mostly lower Tuesday, as investors weighed oil prices, inflation worries and corporate earnings.

Tokyo’s benchmark was higher but other major indexes declined in morning trading after an early rally evaporated on Wall Street.

“The news paints a deteriorating picture for the outlook of major companies amid global growth fears. Traders will be paying close attention to the ongoing earnings season for further signs of how companies are faring in a weakening economy,” Anderson Alves, a trader at ActivTrades, said in a commentary.

Japan’s benchmark Nikkei 225 reversed early losses and added 0.8% in morning trading to 27,013.98. Australia’s S&P/ASX 200 slipped 0.2% to 6,675.50. South Korea’s Kospi dipped 0.2% to 2,369.68. Hong Kong’s Hang Seng dropped 0.7% to 20,702.53, while the Shanghai Composite fell 0.3% to 3,268.52.

Analysts said the Tokyo market is seeing some buying after a three-day weekend. Monday was a national holiday in Japan. Investors are playing catchup and so the rally may be short-lived. Among the issues picking up so far are Fast Retailing, the group company for the Uniqlo clothing retail chain, and Sony Corp.

The S&P 500 fell 0.8% to 3,830.85. Gains in energy producers, big retailers and other companies that rely on consumer spending were outweighed by a pullback in health care and technology stocks.

The Dow slid 0.7% to 31,072.61 and the Nasdaq gave up 0.8%, to 11,360.05. The Russell 2000 index of smaller companies dropped 0.3% to 1,738.42.

Markets are likely to remain volatile through the upcoming earnings season. Johnson & Johnson, American Airlines and Tesla are among the dozens of S&P 500 companies scheduled to issue quarterly snapshots this week.

The U.S. market has been lurching mostly lower for weeks on worries that the Federal Reserve and other central banks will slam the brake too hard on the economy in hopes of bringing down high inflation. If they’re too aggressive with their interest-rate hikes, they could cause a recession.

A key report released last week indicated expectations are easing for inflation among households. That could prevent a more vicious cycle from taking root and ease the pressure on the Federal Reserve.

Expectations have come down for how aggressively the Federal Reserve will raise interest rates at its meeting next week. Traders are now betting on a roughly one-in-three chance for a monster hike of a full percentage point, with the majority favoring a 0.75 percentage point increase. As recently as Thursday, the heavy bet was on a hike of a full point.

Later this week, investors expect the European Central Bank on Thursday to raise interest rates for the first time in 11 years to combat inflation. Many investors expect an increase of 0.25 percentage points, “but more is not unthinkable,” economists wrote in a BofA Global Research report.

Interest rates are one of the two main levers that set prices for stocks. The other is corporate profits, which are under threat given high inflation and slowdowns in parts of the economy. For the moment, at least, analysts are still forecasting continued growth.

Earnings season kicked off last week, and banks have dominated the early part of the schedule for reporting how much they earned from April through June.

Goldman Sachs was among the latest to report, and it rallied 2.5% after its profit and revenue were better than analysts expected.

In the bond market, the yield on the 10-year Treasury rose to 2.98% from 2.96% late Friday. The two-year yield, which rose to 3.17%, is still above the 10-year yield. Some investors see that as an ominous sign that could presage a recession in a year or two.

In energy trading, benchmark U.S. crude fell 22 cents to $102.38 a barrel. It rose 5.1% Monday. Brent crude, the international standard, lost 39 cents to $105.88 a barrel.

In currency trading, the U.S. dollar edged up to 138.21 Japanese yen from 138.13 yen. The euro cost $1.0135, down from $1.0146.

___

AP Business Writers Stan Choe and Alex Veiga contributed.

___

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Buttigieg warns airlines to help travelers or face new rules

WASHINGTON (AP) — Transportation Secretary Pete Buttigieg has warned airlines that his department could draft new rules around passenger rights if the carriers don’t give more help to travelers trapped by flight cancellations and delays. Buttigieg is asking airline CEOs to, at a minimum, provide lodging for passengers stranded overnight at an airport and give […]
1 day ago
People look at the wreckage from a plane crash at Watsonville Municipal Airport in Watsonville, Cal...
Associated Press

Officials: 3 killed after planes collided in California

WATSONVILLE, Calif. (AP) — Three people were killed after two small planes collided in Northern California while trying to land at a rural airport, authorities said Friday. The names of those killed after their planes crashed Thursday at the Watsonville Municipal Airport will be released once their families have been notified, the Santa Cruz County […]
1 day ago
Associated Press

Florida utility gets $500K fine, probation for fatal blast

TAMPA, Fla. (AP) — A Florida utility has been fined $500,000 and placed on three years’ probation for a 2017 deadly explosion at a coal-fired power plant that killed five workers. The U.S. Justice Department said in a news release Friday that Tampa Electric Co. also must adhere to a new safety compliance plan. The […]
1 day ago
Plastic Soul shoes are modeled outside the Doc Johnson factory and corporate offices, Thursday, Aug...
Associated Press

Defective sex toys get a 2nd chance — as fashionable shoes

NEW YORK (AP) — Sex toys and shoes? Try, sex toys IN shoes. A little streetwear label has partnered with a giant in the adult toy industry to create a shoe derived in part from unused, defective amusements that come off the manufacturing line as misfits. Looking a lot like Merrell’s popular Hydro Moc or […]
1 day ago
FILE - U.S. Deputy Secretary of the Treasury Wally Adeyemo speaks during a press conference at EU h...
Associated Press

US Treasury official to visit India amid Ukraine tensions

WASHINGTON (AP) — A top Treasury Department official is set next week to make his first official trip to India since the start of Russia’s invasion of Ukraine. Amid tensions over India’s neutral stance on the invasion that began in late February, the U.S. wants the meetings to focus on how to deepen ties with […]
1 day ago
Police officers cordon off the area of a shooting outside the Emporia shopping center in Malmo, Swe...
Associated Press

Sweden: 2 wounded in shopping center shooting

STOCKHOLM (AP) — Swedish police say two people have been wounded in a shooting at a shopping center in the southern city of Malmo. A suspected was arrested after the shooting Friday afternoon at the Emporia shopping center, which police said appeared to be gang-related. “Police are on site with big resources to map the […]
1 day ago

Sponsored Articles

Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
...

Compassion International Is Determined to ‘Fill’ a Unique Type of Football ‘Stadium’

Compassion International SPONSORED — During this fall’s football season—and as the pandemic continues to impact the entire globe—one organization has been urging caring individuals to help it “fill” a unique type of “stadium” in order to make a lasting difference in the lives of many. Compassion International’s distinctive Fill the Stadium (FtS, fillthestadium.com) initiative provides […]
...

What are the Strongest, Greenest, Best Windows?

Lake Washington Windows & Doors SPONSORED — Fiberglass windows are an excellent choice for window replacement due to their fundamental strength and durability. There is no other type of window that lasts as long as fiberglass; so why go with anything else? Fiberglass windows are 8x stronger than vinyl, lower maintenance than wood, more thermally […]
Asian shares slip as investors eye inflation, earnings