TOKYO — Asian shares were trading mixed Friday ahead of a closely watched U.S. jobs report that may affect global interest rates.
Weaker than expected earnings reports from U.S. technology companies, announced after Wall Street trading ended, pulled Chinese benchmarks lower.
Japan’s benchmark Nikkei 225
NIK,
+0.36%
added 0.3% in early trading. Australia’s S&P/ASX 200
XJO,
+0.66%
gained 0.5% and South Korea’s Kospi
180721,
+0.53%
added 0.6%. Hong Kong’s Hang Seng
HSI,
-1.82%
slipped 1.8%, while the Shanghai Composite
SHCOMP,
-1.37%
dropped 1.4%. Benchmark indexes in Singapore
STI,
+0.35%,
Taiwan
Y9999,
+0.05%,
Malaysia
FBMKLCI,
-0.12%
and Indonesia
JAKIDX,
+0.70%
advanced.
Economists expect the U.S. jobs report to show a slowdown in hiring. The job market has largely remained resilient despite big rate hikes by the Federal Reserve over the last year.
Big tech companies have announced high-profile layoffs recently, but a report on Thursday suggested job cuts are not that widespread. Fewer workers applied for unemployment benefits last week than expected, and the number dropped to its lowest level since April.
“The key risk event will be today’s U.S. jobs reports, where the pace of payroll additions is expected to cool again, while the unemployment rate is likely to have risen slightly,” said Anderson Alves at ActivTrades.
On Wall Street, the S&P 500
SPX,
+1.47%
rallied 1.5% to 4,179.76 a day after hitting its best level since August. The Nasdaq composite
COMP,
+3.25%
soared 3.3% to 12,200.82, while the Dow Jones Industrial Average
DJIA,
-0.11%
lagged because it has less of an emphasis on tech. It slipped 0.1% to 34,053.94.
Meta
META,
+23.28%
helped lead the way with a 23.3% leap after it reported better revenue for the latest quarter than analysts expected and said it expects to spend less this year than earlier forecast. Its profit fell short of expectations but Facebook’s parent also announced a program to buy back $40 billion of its stock.
Stocks have gained since the year began on hopes that the Federal Reserve may soon pause interest rate hikes. Such increases help stamp out inflation but also hurt the economy and investment prices.
“The market is saying the Fed may have its cake and eat it, too: inflation falling and growth not falling off a cliff so far,” said Ella Hoxha, senior investment manager at Pictet Asset Management.
She said the market seems to be putting a 75% probability on the Fed engineering a “soft landing” for the economy, where inflation can drop from its soaring heights without sending the economy into a painful recession.
Among the Big Tech earnings reports that came after trading closed were Google’s parent company, Alphabet
GOOG,
+7.27%
GOOGL,
+7.28%,
which had jumped more than 7%, while Apple
AAPL,
+3.71%
rose 3.7%.
They tumbled back in after-hours trading after releasing disappointing results. The stocks are among the biggest by value so their movements carry outsized sway.
The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, fell to 3.40% from 3.42% late Wednesday. The two-year yield, which moves more on expectations for the Fed, held at 4.10%.
In energy trading, benchmark U.S. crude
CLH23,
-0.24%
fell 9 cents to $75.78 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNJ23,
-0.21%,
the international standard, dropped 9 cents to $82.08 a barrel.
In currency trading, the U.S. dollar
USDJPY,
-0.08%
slipped to 128.57 Japanese yen from 129.67 yen.
