Stocks Drop as Trump-Kim Meet Ends; Yen Ticks Up: Markets Wrap

Feb 28, 2019
Asian stocks extended declines along with U.S. futures after the U.S.-North Korea summit, where leaders had previously been expected to sign a joint statement, ended abruptly without any ceremony. Korean assets dropped and the yen advanced.
 
Equities were already on the back foot from Japan to China earlier in Thursday’s session, when disappointing Chinese economic data underscored concerns about the global economic slowdown. South Korean shares underperformed after the news that President Donald Trump and Kim Jong Un departed the summit venue early in Hanoi. European futures were lower, as was West Texas Intermediate oil.
 
Japanese investors have sold global stocks for seven straight weeks despite rally
After a stellar two-month rally for global shares, the bar for further gains may be high. U.S. Trade Representative Robert Lighthizer gave investors no incentive to bid up prices further on Wednesday, when he dialed back expectations for a sweeping trade deal with China. Nor did the latest monthly China manufacturing PMI, which indicated another contraction.
 
“We still need more expansionary credit and fiscal policy to be implemented to stabilize growth” in China, Betty Wang, senior China economist at ANZ, told news men “The economy is still not in a good shape.”
 
The dollar was little changed after Federal Reserve Chair Jerome Powell told lawmakers Wednesday that he’ll soon announce a plan to stop shrinking the central bank’s balance sheet, now around $4 trillion balance.
 
The recent escalation in tensions between India and Pakistan adds to a list of concerns from trade talks to global growth. Pakistan Prime Minister Imran Khan sounded ready to back away from the brink, using a televised address to call for talks with India so that “better sense should prevail.”
 
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