Hang Seng Index, ASX 200, Nikkei 225: Powell to Test Hang Seng Winning Streak

US Equity Markets: ADP, JOLTs, and the Fed

On Wednesday (May 1), ADP nonfarm employment change and JOLTs Job Openings attracted investor attention. According to the ADP, nonfarm employment increased by 192k in April after rising by 208k in March. However, JOLTs Job Openings fell from 8.813 million to 8.488 million in March.

While the numbers warranted investor attention, the FOMC interest rate decision and press conference were the focal points. The Fed left interest rates unchanged with a target range of 5.25%-5.50%. However, Fed Chair Powell pointed out the lack of progress on inflation but downplayed the chances of an interest rate hike. The takeaway would be hawkish, but not as hawkish as the markets had feared.

On Wednesday, the Dow ended the session up 0.23%. The Nasdaq Composite Index and the S&P 500 declined by 0.33% and 0.34%, respectively.

The overnight FOMC press conference and the US equity market trends will set the tone for the Thursday Asian session. Notably, US corporate earnings will likely take a back seat as investors consider the latest tweaks to Powell’s forward guidance.

Asian Economic Calendar: Aussie Trade and Japanese Consumer Confidence in Focus

On Thursday (May 2), economic data from Australia could influence buyer demand for ASX 200-listed stocks.

Economists forecast the Australian trade surplus to widen from A$7.280 billion to A$7.300 billion in March. Improving trade terms could shift RBA staff growth forecasts for 2024 and the RBA interest rate trajectory. However, investors also must consider the import and export figures.

From Japan, consumer confidence figures for April will influence the buyer appetite for the Yen. Economists forecast Consumer Confidence to increase from 39.5 to 39.7. Upward trends in consumer confidence could signal a pickup in consumer spending and demand-driven inflation. The Bank of Japan could begin discussions about interest rate hikes to ensure price stability.

Commodities: Crude Oil, Gold, and Iron Ore

On Wednesday (May 1), gold spot (XAU/USD) advanced 1.45% to close the session at $2,320. WTI crude oil prices slid, ending the session at $79.00. Market sentiment toward the Fed rate path and easing geopolitical tensions in the Middle East influenced price trends.

On the Singapore Futures Exchange, iron ore prices were down 0.46% on Thursday (May 2).

The USD/JPY and the Nikkei

The USD/JPY tumbled 2.02% on Wednesday, ending the session at 154.600. While pulling back from the intervention zone, the stronger Yen could test buyer demand for Nikkei-listed export stocks.

The Futures Markets

On Thursday, the ASX 200 and the Nikkei 225 were down by 5 and 370 points, respectively. The Hong Kong markets reopen after the Labor Day holiday.

ASX 200

The ASX 200 slid by 1.23% on Wednesday (May 1). Losses were broad-based, with bank, gold, mining, oil, and tech stocks contributing to the Wednesday losses. The S&P ASX All Technology Index (XTX) declined by 1.53%.

Gold-related stocks tracked the gold spot losses from Tuesday. Northern Star Resources Ltd. (NST) and Evolution Mining Ltd (EVN) tumbled 3.41% and 3.45%, respectively.

Woodside Energy Group Ltd (WDS) and Santos Ltd (STO) saw losses of 2.59% and 2.08%, respectively.

During the Wednesday session, mining stocks reacted to a pullback in iron ore prices. Rio Tinto Ltd. (RIO) declined by 0.90%. BHP Group Ltd (BHP) and Fortescue Metals Group Ltd. (FMG) saw losses of 1.65% and 2.80%, respectively.

Commonwealth Bank of Australia (CBA) fell by 0.54%, with Westpac Banking Corp. (WBC) declining by 0.65%. ANZ Group Holdings Ltd. (ANZ) and National Australia Bank Ltd. (NAB) ended the session down 0.28% and 0.03%, respectively.

Hang Seng Index

The Hang Seng Index was closed on Wednesday for the Labor Day holiday.

The Nikkei 225

(Graph for reference purposes only)

The Nikkei 225 declined by 0.34% on Wednesday (May 1).

Bank stocks had a mixed Wednesday session. Sumitomo Mitsui Financial Group Inc. (8316) gained 0.16%. However, Mitsubishi UFJ Financial Group Inc. (8306) fell by 1.01%.

It was also a mixed session for the main components of the Nikkei 225.

Softbank Group Corp. (9948) slid by 1.59%. Tokyo Electron Ltd. (8035) and Fast Retailing Co. Ltd. (9983) saw losses of 0.51% and 0.87%, respectively.

KDDI Corp. (9433) and Sony Group Corporation (6758) bucked the trend, gaining 0.07% and 0.11%, respectively.

For upcoming economic events, refer to our economic calendar.