Asian Stock Markets
Asian shares fell on Wednesday as a rise in U.S. bond yields above 3
percent and warnings from bellwether U.S. companies of higher costs
drove fears that a boom in corporate earnings may be near its peak.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.3 percent, hitting their weakest in almost three weeks, with tech-heavy Taiwan shares .TWII slipping to two-month lows on worries about slowing semi-conductor demand. Japan's Nikkei .N225 dropped 0.2 percent.
European shares are expected to fall, with spread-betters calling a 0.7 to 0.9 percent drop in Britain's FTSE .FTSE, Germany's Dax .GDAXI and France's Cac .FCHI.
S&P E-mini futures ESc1 slipped 0.2 percent. Wall Street shares skidded overnight, with the S&P 500 .SPX slumping 1.34 percent, the most in two-and-a-half weeks.[.N]
Industrial heavyweight Caterpillar (CAT.N) beat earnings estimates due to strong global demand but its shares tumbled 6.2 percent after management said first-quarter earnings would be the “high water mark” for the year and warned of increasing steel prices.
Fujito noted major financial shares such as Goldman Sachs (GS.N) and Citigroup (C.N) as well as Google parent Alphabet GOOG.N, the first major tech firm to report earnings, have followed a similar pattern.
Corporate earnings are in solid shape, with analysts estimating 21.1 percent growth in the Jan-March quarter among U.S. S&P500 firms, according to Thomson Reuters data. A similar trend is expected globally.
Creeping gains in U.S. Treasury yields are fuelling fears that portfolio managers may move money into safer fixed-income securities at the expense of riskier assets like stocks and emerging markets.
The 10-year yield, a benchmark for global borrowing costs, has been driven steadily higher by a combination of concerns over inflation, growing debt supply, and rising Federal Reserve borrowing costs.
The 10-year U.S. Treasuries yield US10YT=RR rose to as high as 3.009 percent. A break of its January 2014 high of 3.041 percent could turn investors even more bearish.
Fed Funds rate futures prices <0#FF:> have been constantly falling this month, pricing in a considerable chance of three more rate hikes by the end of this year.
The impact is already reverberating in many emerging markets, with JPMorgan’s emerging market bond index .JPMEPR hitting a two-month low.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.3 percent, hitting their weakest in almost three weeks, with tech-heavy Taiwan shares .TWII slipping to two-month lows on worries about slowing semi-conductor demand. Japan's Nikkei .N225 dropped 0.2 percent.
European shares are expected to fall, with spread-betters calling a 0.7 to 0.9 percent drop in Britain's FTSE .FTSE, Germany's Dax .GDAXI and France's Cac .FCHI.
S&P E-mini futures ESc1 slipped 0.2 percent. Wall Street shares skidded overnight, with the S&P 500 .SPX slumping 1.34 percent, the most in two-and-a-half weeks.[.N]
Industrial heavyweight Caterpillar (CAT.N) beat earnings estimates due to strong global demand but its shares tumbled 6.2 percent after management said first-quarter earnings would be the “high water mark” for the year and warned of increasing steel prices.
Fujito noted major financial shares such as Goldman Sachs (GS.N) and Citigroup (C.N) as well as Google parent Alphabet GOOG.N, the first major tech firm to report earnings, have followed a similar pattern.
Corporate earnings are in solid shape, with analysts estimating 21.1 percent growth in the Jan-March quarter among U.S. S&P500 firms, according to Thomson Reuters data. A similar trend is expected globally.
Creeping gains in U.S. Treasury yields are fuelling fears that portfolio managers may move money into safer fixed-income securities at the expense of riskier assets like stocks and emerging markets.
The 10-year yield, a benchmark for global borrowing costs, has been driven steadily higher by a combination of concerns over inflation, growing debt supply, and rising Federal Reserve borrowing costs.
The 10-year U.S. Treasuries yield US10YT=RR rose to as high as 3.009 percent. A break of its January 2014 high of 3.041 percent could turn investors even more bearish.
Fed Funds rate futures prices <0#FF:> have been constantly falling this month, pricing in a considerable chance of three more rate hikes by the end of this year.
The impact is already reverberating in many emerging markets, with JPMorgan’s emerging market bond index .JPMEPR hitting a two-month low.
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