New highs for U.S. stocks did not translate into gains across Asian markets on Friday. Japan's Nikkei edged 0.3% higher, but Hong Kong fell 1.3%, and South Korea shed more than 1%. Wall Street was closed for Independence Day following a robust jobs report. Investors focused on President Trump's July 9 trade deal deadline and on a new $3.4 trillion spending bill that could affect future U.S. debt.
Asian Markets Decline on Growing Concerns Over Trade
Asian stocks fell on Friday for the most part. Japan's Nikkei added 0.3%, but Hong Kong's Hang Seng lost 1.3%. South Korea's KOSPI dropped over 1 percent, and Taiwan's index was down 0.2 percent. Shares in mainland China also fell modestly. Markets in the United States were closed for the July 4th holiday, but futures were 0.2% lower after the S&P 500 notched a record close on Thursday in a 0.8% surge. The Dow and Nasdaq also climbed 0.8% and 1%, respectively.
It was another case of markets being thrown into disarray as President Trump's July 9 deadline for trade deals with Canada and the rest of the world approaches, and traders, investors, execs, and bankers have no idea what will happen. He added the extensions would stop and more tariff letters would be sent out. To date, agreements have been struck with China, Britain, and Vietnam. Talks with India appear close, but progress with Japan and South Korea has stalled. The absence of new transactions is worrying the markets.
Wall Street Lifted by Jobs Data, Rate Cut Bets Cooled
The U.S. delivered a strong jobs report on Thursday, indicating the economy is still growing well. This reduced the likelihood of a Federal Reserve rate cut in July. The 10-year Treasury yield was 4.34%, up 4.7 basis points, while the 2-year yield climbed 9.3 basis points, to 3.88%.
The dollar rebounded on Thursday, gaining 0.4% overall. It was a tick lower Friday morning, at 144.62 yen and 0.7942 against the Swiss franc. The euro added 0.1% to $1.1766, and the British pound was steady at $1.3650.
Trump's massive new $3.4 trillion spending bill also made headlines. The U.S. House approved the 869-page law late Thursday, which would increase the nation's already $36.2 trillion debt. Concern about the fiscal picture aside, markets remained calm because of the rosier economic data that came previously.
Oil Prices Flat, Gold Moves Higher
The price of gold edged 0.1% higher, to $3,329.54 an ounce, as investors continued to seek safety. Brent crude futures added 1 cent, to $68.81 a barrel, and U.S. crude was up 3 cents, to $67.03. Trading was light with U.S. markets closed ahead of the weekend.
