(Bloomberg) — Asian equities were primed to open lower Friday after US stocks fell for a fifth day, underscoring a cautious start to the year on Wall Street.
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Futures contracts for shares in Australia and Hong Kong slipped, taking a cue from New York trading. Nikkei futures also declined, though Japan’s equity trading is closed for a holiday.
The S&P 500 and Nasdaq 100 both fell 0.2%, partly weighed down by lackluster results from Tesla Inc. The electronic vehicle-marker’s fourth-quarter deliveries missed estimates and annual sales dropped for the first time in over a decade. The carmaker’s stock has registered its worst five-day drop in more than two years and has now fallen 18% since Christmas.
The dollar strengthened for a seventh session to set a fresh two-year high, while the yen weakened against the greenback for a third day Thursday.
Australian and New Zealand government bond yields were steady, reflecting muted moves in Treasury yields in choppy trading.
The rate on the benchmark 10-year ended Thursday nearly 20 basis points above the level prior to Jerome Powell’s hawkish turn at a Dec. 18 Federal Reserve meeting. Big moves have proliferated across asset classes after Powell’s board expressed waning enthusiasm for interest-rate cuts.
Initial applications for US unemployment fell to an eight-month low, reflecting relatively muted levels of job cuts in a labor market that has remained surprisingly resilient. Goldman Sachs Group Inc. economists led by Jan Hatzius noted that “seasonal adjustment challenges can make jobless claims readings particularly volatile around the holiday season.”
The Cboe Volatility Index climbed for the fourth time in five days, though still sits below 18.
For corporate earnings, 2025 will be a “show-me year,” according to Lisa Shalett at Morgan Stanley Wealth Management, who warned that the dominance of the Magnificent Seven — the big technology stocks responsible for the bulk of last year’s gains — was teetering.
“This idea that they as a group can trade together and lead the market may falter in 2025,” she said. As for the grim slide in the final days of 2024, it’s “too soon to call it a bad omen,” Shalett said on Bloomberg Television.
US stocks have been straining to snap a losing streak that took some shine off the S&P 500’s best two-year run dating back to the late 1990s. The index has surged more than 50% since the start of 2023, driven by gains in the tech megacaps amid enthusiasm about the boost to profits from artificial intelligence.
