Global Stocks Slip as Investors Await Key U.S. Inflation Report

European shares were trading lower on Friday following a mixed session in Asia as investors awaited a key U.S. inflation report.

 

Economists expect the U.S. personal consumption expenditures index, due later in the day, to show inflation remained at about 2.6 per cent in July.

 

The futures for the S&P 500 and Dow Jones Industrial Average were down 0.3 per cent. Oil prices were also lower.

 

In early European trading, Germany’s DAX shed 0.6 per cent to 23,901.77 as the latest figures showed unemployment remained at 6.3 per cent in July, for a sixth straight month. Adjusted for seasonal factors, it topped 3 million for the first time in a decade.

 

Britain’s FTSE 100 lost 0.3 per cent to 9,191.08 while the CAC 40 in Paris fell 0.7 per cent to 7,712.11.

 

During Asian trading, Tokyo’s Nikkei 225 fell 0.3 per cent to 42,718.47 after a slew of data released Friday showed Japan’s factory output slumped in July as higher tariffs hit on exports to the United States. Inflation in Tokyo also slowed to 2.6 per cent year-on-year, while the jobless rate fell to 2.3 per cent in July from 2.5 per cent in June.

 

“Today’s Japanese data was mixed, with disappointing industrial production threatening third-quarter growth, while a tight labor market points to increased wages and underlying inflation remaining firm,” ING Economics said in a commentary. “We still think October is the most likely timing for a Bank of Japan rate hike.”

 

Hong Kong’s Hang Seng index rose 0.3 per cent to 25,077.62, while the Shanghai Composite index added 0.4 per cent to 3,857.93. Shares in computer chipmaker Cambricon Technologies shed 6 per cent after soaring 15.7 per cent on Thursday, closing at 1,492.49 yuan (about US$209) a share. But it remained the priciest stock on Shanghai’s exchange after displacing Kweichou Moutai, whose shares gained 2.3 per cent to 1,480 yuan ($207.50).

 

Chinese computer chipmakers have seen their share prices surge as the government provides heavy support to encourage wider manufacturing and use of chips made in China.

 

“Hyper-growth in China’s tech landscape is starting to feel like a zero-sum cage fight rather than a clean runway. Even Cambricon’s AI chip story, this week’s darling, is now flashing red lights, warning of trading risks after an 8 per cent skid,” Stephen Innes of SPI Asset Management said in a commentary.

 

South Korea’s KOSPI shed 0.3 per cent to 3,186.01, while Australia’s S&P/ASX 200 edged 0.1 per cent lower to 8,973.10.

 

Taiwan’s TAIEX shed earlier gains and was down less than 0.1 per cent, while India’s BSE Sensex slipped 0.1 per cent.

 

On Thursday, the S&P 500 rose 0.3 per cent, lifting the benchmark index to its second record high in a row. The Dow Jones Industrial Average reversed an early slide and gained 0.2 per cent, enough to move past its record high set last Friday.

 

The Nasdaq composite closed 0.5 per cent higher, finishing just short of its all-time high set two weeks ago.

 

Gains in the technology and communication services sectors offset losses elsewhere in the market.

 

Tech giant Nvidia fell 0.8 per cent a day after reporting quarterly earnings and revenue that beat Wall Street analysts’ forecasts, though the company noted that sales of its artificial intelligence chipsets rose at a slower pace than analysts anticipated.

 

Traders also had their eye on new government reports on the job market and economy.

 

The Labor Department reported that applications for unemployment benefits fell last week, the latest sign that employers are holding onto their workers even as the economy has slowed.

 

The most recent government data suggests hiring has slowed sharply since this spring.

 

Meanwhile, the Commerce Department reported that U.S. gross domestic product — the nation’s output of goods and services — grew at a 3.3 per cent annual pace in the April-June quarter after shrinking 0.5 per cent in the first three months of this year due to the fallout from the Trump administration’s trade wars.

 

Still, the sluggishness in the job market is a key reason that Federal Reserve Chair Jerome Powell signaled last week that the central bank may cut its key interest rate at its meeting next month.

 

In other dealings on Friday, U.S. benchmark crude lost 42 cents to $64.18 per barrel. Brent crude, the international standard, slid 41 cents to $67.57 per barrel.

 

The U.S. dollar rose to 147.00 Japanese yen from 146.95 yen. The euro fell to $1.1675 from $1.1684.

 

 

 

 

Teresa Cerojano, The Associated Press

This article was first reported by Associated Press