Today’s Asia Pacific trading day looks likely to be dominated by two forces; the accelerating selloff in global stock markets, and a series of economic data announcements from New Zealand.
New Zealand is up first. The Kiwi Dollar continued the selloff that started after yesterday’s RBNZ meeting with the central bank’s more aggressive attempt to talk down NZD apparently working. Today New Zealand PMI, food prices and home sales could impact trading.
The ongoing war of words between the US and North Korea started to jolt the markets out of their summer slumber and today, earnings from US retailers accelerated the process. Macy’s plunged 10% despite beating the street on earnings as traders focused on negative same store sales even though they weren’t as bad as expected. Kohl’s took almost a 5% hit. US retailers remain in the spotlight with Nordstrom beating by a penny and JC Penney reporting Friday morning. In contrast, Canadian Tire rallied 5.7% on the back of a positive earnings report and growing same store sales.
With markets moving into what has historically been the weakest and most volatile time of the year for stocks, traders suddenly remembering the concept of risk have been moving capital back into defensive havens. Capital leaving stocks sent the Dow back under 22,000 and the NASDAQ down 2.3%. Both gold and JPY broke out today with the Yen gaining on USD, EUR and GBP.
Crude oil is coming off a volatile day that appears to have been more technically driven than news driven. With traders exiting risk markets, WTI’s test of the $50.00 round number sparked a wave of selling/profit-taking that knocked it back over 2% down toward $48.50. Oil may attract attention Friday around the afternoon Baker Hughes drill rig count. Oilfield exploration activity usually ramps up in the summer but there have been rumblings of slowing demand and budget cuts. Last week the rig count fell and a repeat could cut into expectations of US production growth.
Traders have reacted negatively to tonight’s technology earnings. Snap has tumbled 12% in aftermarket trading after sales and active users came in below expectations. Nvidia is down 6% so far despite posting better than expected earnings.