Stocks dropped in Europe and Asia alongside US equity futures amid deepening concerns about the outlook for corporate earnings and global trade. The dollar slipped while Treasuries were steady.
The Stoxx Europe 600 fell for a second day as profit warnings or sales declines from software giant SAP and fashion retailer Asos spooked investors. In Asia, a Tokyo benchmark fell 2.1% amid reports that Canon Inc. operating profit could slump this year. Hong Kong, Shanghai, Seoul and Sydney saw more modest declines.
Nasdaq futures fell after Netflix Inc.’s surprise loss of U.S. customers last quarter sent its shares down after hours. WTI oil slipped for a fourth day, trading below $57 a barrel in New York.
The yen strengthened to a three-week high amid trade tensions between Japan and South Korea, with the latter reportedly finalizing countermeasures against Tokyo’s plan to remove it from a list of trusted export countries. The pound rose amid hopes for a Brexit compromise stemming from a new Irish border plan.
With less than two weeks before the Federal Reserve’s policy meeting at which investors expect an interest-rate cut, the central bank’s anecdotal Beige Book report yesterday suggested the outlook was generally positive and the labor market remains tight. Yet companies are still struggling to pass on higher wages and tariff-related costs to customers, and the start of earnings season hasn’t improved sentiment.
Investors betting on rate cuts in Asia were proven right on Thursday, as central banks in South Korea and Indonesia lowered benchmarks. Both countries’ currencies strengthened modestly. They followed similar moves in Malaysia, India and the Philippines.