TOKYO (AP) — Global stocks were mixed on Wednesday as markets looked to strong economic signs from the United States and China as engines of growth.
European stocks slid in early trading, while benchmarks ended higher in Japan, China and Australia. Stocks fell in South Korea.
France’s CAC 40 fell 0.3% to 6,570.14 in early trading, while Germany’s DAX slipped 0.7% to 13,812.17. Britain’s FTSE 100 fell 0.3% to 7,513.18. US stocks were expected to fall with Dow futures down 0.4% at 33,995.0. S&P 500 futures fell 0.6% to 4,284.25.
Analysts have warned that major risks remain, such as rising COVID-19 cases in some Asian countries, as well as worries about global inflation and China’s policies to fight infections.
“Economic growth expectations in China and the United States will likely remain key in gauging recession fears. China’s zero-COVID policy is still a significant headwind for global growth,” said Anderson Alves of ActivTrades.
Japan’s benchmark Nikkei 225 added 1.2% to end at 29,222.77. Australia’s S&P/ASX 200 rose 0.3% to 7,127.70. The South Korean Kospi fell 0.5% to 2,521.84. Hong Kong’s Hang Seng added 0.5% to 19,922.45, while the Shanghai Composite edged up 0.5% to 3,292.53.
In New Zealand, the central bank raised its benchmark interest rate from 2.5% to 3% as it continues to fight inflation. The Reserve Bank of New Zealand said domestic spending remained resilient in the face of local and global headwinds, and employment was robust. Lower oil prices gave inflation some breathing room, the bank said, but it needed to continue to tighten monetary conditions until inflation was brought back to its target range of 1% to 3% .
Inflation in New Zealand is 7.3% and unemployment 3.3%.
In Japan, government data showed a trade deficit in July for the 12th consecutive month. Soaring oil prices and a falling yen were key factors. Japan imports almost all of its oil.
New cases of COVID-19 have increased in recent weeks as restrictions on economic activities ease. Ambulances had to circle for hours looking for hospitals that could accept patients. But domestic travel and shopping appear to be back, boosting consumption.
The latest market swings came as traders cautiously eyed generally encouraging financial results from major US retailers. U.S. stocks had their best month in a year and a half in July and the winning streak continued into August, partly on hope inflation calms down. The latest government report on consumer prices showed that inflation essentially stagnated from June to July.
Latest retail results show spending remains strong even as U.S. consumers face the the highest inflation in 40 years. Wall Street fears that rising prices for everything from food to clothing could dampen the main engine of growth in the economy, consumer spending.
Investors will receive more updates on the retail sector on Wednesday, when Target releases its results and the U.S. Commerce Department releases its July retail sales report. Economists polled by FactSet expect modest growth of 0.2% from June, when sales rose 1%.
Retail reports close out the latest round of corporate earnings, which have been closely watched by investors trying to determine the impact of inflation on businesses and consumers, while trying to gauge the reaction of the US Federal Reserve.
The central bank raises interest rates in an effort to slow economic growth and contain inflation, although it risks braking too hard and tipping the economy into a recession.
In July, the Fed raised its benchmark interest rate by three-quarters of a point for the second consecutive time. On Wednesday, Wall Street will get more details on the process behind this decision when the Fed releases the minutes of this meeting. Investors expect a half-point increase at the Fed’s next meeting in August, according to CME’s FedWatch tool.
In energy trading, benchmark U.S. crude rose 40 cents to $86.93 a barrel. US crude oil prices fell 3.2% on Tuesday. Brent, the international standard, gained 38 cents to $92.72 a barrel.
In currency trading, the US dollar rose slightly to 134.86 Japanese yen from 134.22 yen. The Euro traded at $1.0181, down from $1.0171 previously.
AP Business Writers Damian J. Troise and Alex Veiga contributed. AP writer Nick Perry contributed from Wellington, New Zealand.
Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama
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