Asia falls on weak US earnings

Asia started in red this morning in line where the US and European markets ended last week. Disappointing corporate earnings from General Electric and McDonalds, along with steep fall in oil prices and increased worries on Europe’s dept crisis, influenced market sentiments. Negative sentiments are once again prevailing at when a new trading week opens in Asia. Numbers for Japanese exports, a key driver of the world’s third-biggest economy, saw a sharp fall impacting the MSCI-index of Asia-Pacific shares which fell 0,6 percent. Also Korea and Australia are down.
The result season is continuing in the United States this week with Facebook, Yahoo and Apple ready to present third quarterly results. First out is Facebook on Tuesday. Google, Microsoft and Intel disappointed investors last week. That turned around the positive trend we have seen in the stock markets since the Federal Reserve and European Central Bank’s decisions for monetary easing. The outcome of the forthcoming US presidential elections are also weighing in on investor’s sentiments encouraging profit taking and sitting on the fence.
The euro is resilient despite mixed signal from the euro zone over the progress of its three years debt crisis. Euro/USD is trading 0,3 percent up at 1.3046. The final outcome of the Spanish municipal elections which is regarded a test on the government’s austerity policies, are not final. Japanese yen continues to fall. USD/JPY is at 79,50 with the yen 0,3 % weaker. Brent crude has recovered from its bottom close to USD 110 a barrel trading at 110,85. Precious metals that fall steeply last week have recovered somewhat this morning. Gold is at 1726 up from 171. Silver is trading at 32,30, one percent up from bottom levels seen on Friday.
The rating agency Standard and Poor raised over the weekend question marks whether the last Chinese GDP numbers of 7,4% economic growth have been politically manipulated? The real figures were presumed to be closer to 6,5 %. Some analysts see this as part of the Chinese bashing; which has been “popular” in some American political circles lately. From Beijing there is news that Chinese top leaders have asked policy think-tanks to present the most ambitious economic reform proposals for decades. The proposals shall contain to curb the power of state companies and open for bigger discretionary freedom to set interest rates and the value of the Yuan currency.
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