Global stocks fell sharply, and the yen rose as market volatility continued to reign, according to reports. On Thursday, European shares dropped and U.S. stock futures slipped after turbulent sessions in Asia and on Wall Street. Investors struggled to find their footing in what has been a wild week for markets.
TurkishNY Radio reports that the yen and U.S. bonds rose as traders awaited U.S. weekly jobless claims data.
This data has taken on extra significance after weak employment numbers helped spark a market rout earlier in the week.
Global Stocks Face European Decline
Europe’s continent-wide Stoxx 600 index fell 0.9% after climbing 1.5% on Wednesday. Germany’s DAX index was down 0.6%, and Britain’s FTSE 100 dropped 1%. Futures for the U.S. S&P 500 were down 0.2%, following a 0.8% drop the previous day. The S&P 500 had given up gains of as much as 1.7% in morning trading before the decline.
Erik Nelson, a macro strategist at Wells Fargo said,
“When you have a volatility shock like this, and you have a degree of unwind in certain positions, you’re very prone to sudden reversals and also a degree of uneasiness as the adjustment continues. I would be surprised if we just went back to everything being fine.”
In Japan, the Nikkei share index swung from early losses of as much as 2.5% to gains of 0.8%, before finishing 0.7% lower. Weak U.S. jobs data last week, combined with a dramatic rally in the Japanese yen and concerns about an artificial intelligence bubble, has sent global stocks tumbling.
Global Stocks and the Yen’s Impact
The S&P 500 slumped 3% on Monday and sits 2.8% lower for the week, although it remains around 9% higher for the year. Japan’s yen rebounded somewhat on Thursday, adding to investor unease, after dropping around 1.6% on Wednesday. The dollar was last down 0.3% at 146.26 yen.
According to broader research done by the TNYR team, it was noted that yen has surged 11% since hitting a 38-year low in July, helped by intervention from authorities, a surprise Bank of Japan rate hike, and the U.S. jobs slowdown that has weighed on the dollar.
This rally has forced investors to dramatically unwind carry trades, where they borrow cheaply in Japan to buy dollars and other currencies to invest in higher-yielding assets, triggering a 12% plunge in Japanese stocks on Monday.
Source: LSEG Datastream
Deputy BOJ Governor Shinichi Uchida, on Wednesday, played down the chance of another near-term hike, but minutes released on Thursday revealed a hawkish slant among the board. The U.S. dollar index was little changed on Thursday at 103.12, after hitting an eight-month low of 102.69 on Monday. The euro and the pound were also flat.
Global Stocks Await U.S. Jobless Claims Data
TurkishNY Radio noted that the yield on the benchmark 10-year U.S. Treasury note was last down 6 basis points (bps) at 3.909%, after rising on Wednesday following a weak debt auction.
Investors are on edge, waiting for the U.S. weekly jobless claims data, which could provide further insights into the health of the economy. This data has become increasingly critical after weak employment numbers contributed to the market’s volatility earlier in the week.
Uncertainty in Global Stocks Market
The global stocks market continues to react to various factors, including the rise of the yen, the impact of U.S. jobs data, and broader economic concerns.
As global stocks remain under pressure, the market’s future is uncertain. Investors are closely watching economic indicators and central bank actions to navigate the turbulent times. TurkishNY Radio will continue to provide comprehensive coverage of these market movements.
