Asian stocks tumbled Friday as reports revealed growth of American workers have been persisting at high rates following the U.S. market contracted in a roughly 33% yearly rate in the spring, the worst quarter on record. Earnings reports, an indicator of how well companies are handling the fallout in the coronavirus pandemic, added to the forefront. Some tech companies have bucked the trend and are showing favorable outcomes. But a lot of organizations are hurting. Japan’s Nikkei 225
tumbled 2.3% while Hong Kong’s Hang Seng index
rose 0.2%. The Shanghai Composite
was about flat while the smaller-cap Shenzhen Composite
gained 0.3%. South Korea’s Kospi
slipped 0.2%, Taiwan’s Taiex
declined 0.3%, and Australia’s S&P/ASX 200
fell 1.6%. Trade in Singapore, Malaysia and Indonesia were shut for vacations.
August has been a bad month for stocks, noted Stephen Innes of AxiTrader Corp.
“Stock markets are looking extraordinarily corrective to the extent that we could be entering a pullback phase as we head into August, most commonly referred to as the summer swoon,” Innes said in a commentary.
In one positive signal, China reported its manufacturing activity edged up in July and export orders strengthened despite weak U.S. and European demand. The monthly survey released Friday was another sign the world’s second-largest economy is gradually recovering from the coronavirus pandemic.
Central bank meetings various countries are on the agenda for the coming week.
“Second-quarter GDP for Indonesia and the Philippines will also draw scrutiny, highlighting the impact of the pandemic,” stated Bernard Aw, principal economist for IHS Markit in Singapore.
The Japanese government stated late Thursday the nation’s economy was likely to sink 4.5% for the fiscal year ending at March 2021. It forecasts a return to growth in the following fiscal year.
Among the Japanese companies reporting earnings next week are Sony Corp.
, Honda Motor Co.
, Toyota Motor Corp.
and Nintendo Co.
Some companies are holding up better than others.
Japanese media reports said Toyota was on course to become the No. 1 automaker in the world again, overtaking Volkswagen, now the top manufacturer in global vehicle sales. Toyota’s sales were already recovering in markets like China, which is recovering from its early outbreaks of COVID-19, according to the company.
Overnight, the U.S. reported the economy contracted at a record-shattering 32.9% annual rate in April-June as pandemic shutdowns expanded.
News of the deep, steep collapse came as a resurgence of outbreaks has pushed businesses in many areas to close for a second time. The authorities’s estimate of that the second-quarter fall in the gross domestic product has no comparison since records began in 1947. The previous worst quarterly contraction — at 10%, less than a third of what was reported Thursday — occurred in 1958 during the Eisenhower administration.
The bad news was no big surprise, and on Wall Street, the S&P 500
dropped 0.4% to 3,246.22. Nearly three out of four stocks in the index declined. Among the hardest-hit were oil producers, banks and other companies that most need the market to escape recession.
The Dow Jones Industrial Average
lost 0.9% to 26,313.65.
Stocks seemed set for a much steeper fall earlier from the day but stronger-than-expected profits reported by UPS and other firms helped the market trim its losses. So did steadying prices for Amazon and other big tech-oriented stocks, which reported their own results after the day’s trading ended.
Anticipation of their reports, which proved to be even better than Wall Street expected, helped the Nasdaq composite
completely erase its early loss and climb 0. ) 4% to 10,587.81.
But overall, earnings reports have been far below year-ago levels, before the pandemic struck. The big businesses in the S&P 500 are on track to report a nearly 38% drop for the second quarter from a year earlier, according to FactSet.
Shortly after trading ended for the day, Amazon
and Google’s parent organization Alphabet
all reported bigger profits for that the latest quarter than Wall Street had forecast. Investors have continued to flock to them expecting they will thrive as this pandemic accelerates a shift toward online commerce.
Benchmark U.S. crude
gained 14 cents to $40.06 a barrel in electronic trading on this New York Mercantile Exchange. Brent crude
, the international standard, rose 37 cents to $43.31 that a barrel.
slipped to 104.22 Japanese yen in 104.73 yen.