Asian stocks mostly up as markets await Fed Chairman’s speech | Way of life

TOKYO (AP) — Asian stocks were mostly higher on Thursday as Wall Street and global markets await a much-anticipated speech from the chairman of the U.S. Federal Reserve on interest rates later this week.

Benchmarks rose in Japan, Australia and South Korea. Trading was delayed in Hong Kong for a storm, while shares in Shanghai rose slightly but remained virtually unchanged in morning trading.

Market watchers say stock prices are set to swing for some time whether the focus is on controlling inflation or on recession risks. In Asia, a wait-and-see climate has set in over the past few sessions, as the markets wait for signs from the Fed.

Chinese stocks fell this week amid recent key rate cuts by the People’s Bank of China, which also announced policies to try to stimulate the economy.

“Market participants may want to see a more consistent recovery as an indicator of policy success before confidence lifts,” said Yeap Jun Rong, market strategist at IG in Singapore.

Japan’s benchmark Nikkei 225 edged up 0.5% in morning trade to 28,460.60. Australia’s S&P/ASX 200 gained 0.8% to 7,052.40. The South Korean Kospi rose 0.8% to 2,467.09. The Shanghai Composite was little changed at 3,215.77. Trading in Hong Kong was delayed due to a storm.

On Wall Street, the S&P 500 edged up 12.04 points, or 0.3%, to 4,140.77, as traders broadly again held back from making big moves. The Dow Jones Industrial Average added 59.64, or 0.2%, to 32,969.23, and the Nasdaq composite rose 50.23, or 0.4%, to 12,431.53.

It was the second day in a row of modest moves for the market, but they follow strong up and down swings in previous weeks.

Stocks soared throughout the summer on hopes that inflation was near its peak and that the Federal Reserve might raise interest rates less aggressively than previously feared. But recent comments from Fed officials have dampened those expectations, sending Wall Street to its worst day in months on Monday. Discouraging reports on the economy meanwhile highlighted the risk of a recession.

Wall Street’s attention remains focused on Friday, when Fed Chairman Jerome Powell delivers remarks at an annual economic conference in Jackson Hole, Wyoming. This has been the setting for emotional market speeches in the past, leading investors to hope that Powell will offer clarification on further rate hikes. Will it be hawkish, i.e. what traders call a bias towards aggressive rate hikes? Or dovish, which is Wall Street’s parlance for easier terms?

Brian Jacobsen, senior investment strategist at Allspring Global Investments, doesn’t expect Powell to be clearly one or the other.

“I don’t think he wants to come across as hawkish or dovish, maybe he wants to come across as a chicken,” Jacobsen said, citing the many variables that could change the Fed’s thinking ahead. its next rate policy meeting in September.

Jacobsen warned that the speech could be a “nothingburger” with little to chew on, although the market may view that as a positive given some expectations that Powell would appear hawkish.

Higher interest rates slow the economy in hopes of reducing inflation. But they also risk stifling the economy if done too aggressively, and they drive down the prices of all kinds of investments.

Yields on Treasuries have risen recently, partly in anticipation of the Fed continuing to lean toward an aggressive rate hike to stifle the worst inflation in decades. The two-year yield, which tends to track Fed expectations, rose to 3.40% from 3.30% on Tuesday night.

The 10-year yield, which helps set rates for mortgages and many types of loans, fell to 3.11% from 3.05% after a report showed U.S. durable goods orders were flat in July. Excluding transport, however, growth was stronger than expected by economists.

In the stock market, Intuit rose 3.6% for one of the largest gains in the S&P 500. The owner of TurboTax provided stronger-than-expected results for the last quarter and expected revenue for the fiscal year to come that have exceeded the expectations of some analysts.

On the losing side were several retailers, which are among the latest companies to report spring earnings.

Nordstrom fell 20% after slashing its financial guidance for the year, despite posting a higher-than-expected profit for the latest quarter. It’s the latest major retailer to say it’s struggling to keep up with changing customer shopping habits.

Shoppers are shifting their spending from stores to travel and other experiences. Those who still walk through the doors are seeing their purchasing power reduced by high inflation, with the pressure hitting low-income customers in particular. This leaves the industry facing mountains of unsold inventory.

Advance Auto Parts fell 9.6% after its quarterly results fell short of expectations. The auto parts chain said its DIY customers are being squeezed by high inflation and gasoline prices well above what they were a year ago.

In energy trading, benchmark U.S. crude rose 72 cents to $95.61 a barrel. Brent crude, the international standard added 77 cents to $101.99.

In currency trading, the US dollar fell to 136.74 Japanese yen from 137.09 yen. The euro was little changed at 99 cents.

AP Business Writer Stan Choe contributed.

Yuri Kageyama is on Twitter

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