Bloomberg News

Japan Stock Futures Fall as U.S. Jobs Data Fuels Concern

July 08, 2012

Japanese and Australia stock futures fell after a U.S. jobs report heightened concern the world’s largest economy is slowing as company profits decline.

American Depositary Receipts of BHP Billiton Ltd. (BHP), the world’s biggest mining company, slid 0.8 percent as metals prices dropped and investors sold shares of companies with earnings closely tied to economic growth. Those of Nomura Holdings Inc. (8604), Japan’s No. 1 brokerage, fell 1.7 percent. ADRs of Komatsu Ltd. (6301), a construction equipment maker that gets 23 percent of sales in the Americas, lost 1.6 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,990 in Chicago July 6, down from 9,020 in Osaka, Japan. They were bid in the pre-market at 8,970 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 0.3 percent today. New Zealand’s NZX 50 Index retreated 0.5 percent in Wellington.

“When one reflects on the subdued U.S. payrolls number last Friday, the case for some additional quantitative easing from the Fed becomes even more compelling,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth-management unit. The Swiss bank has about $1.5 trillion in assets under management. “Markets will be a little apprehensive as they approach the U.S. earnings season.”

Futures on the Standard & Poor’s 500 Index fell 0.3 percent today. The underlying gauge slid 0.6 percent last week. American employers hired fewer workers than forecast in June and the unemployment rate held at 8.2 percent, a June 6 report showed.

Reporting Season

Alcoa Inc. (AA:US) is the first Dow Industrial Average company in the U.S. scheduled to report quarterly results today. Analysts project a 1.8 percent decline in profits for S&P 500 companies in the April-June period, which would mark the first year-over- year decrease since 2009.

The MSCI Asia-Pacific (MXAP) declined 8 percent from this year’s highest level in February amid concern economies in China and the U.S. are slowing as Europe’s debt crisis deepens. Still, the gauge has risen 4.2 percent in 2012 through July 6, compared with a 7.7 percent advance on the S&P 500 and a 4 percent increase on the Stoxx Europe 600 Index. Asian shares advanced last week on anticipation central banks would ease monetary policy to spur growth.

Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.6 times for the Stoxx 600.

Singapore’s Straits Times Index (FSSTI) completed an eight day advance on July 6, its longest streak of gains since April 2011.

China Inflation

The Thomson Reuters/Jefferies CRB Index of raw materials retreated 2.2 percent on July 6. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in New York lost 1.5 percent to 91.12.

China’s inflation probably slowed to 2.3 percent in June, the lowest rate since January 2010, according to an analyst survey ahead of a government report due to be released today at 9:30 a.m. in Beijing.

Chinese Premier Wen Jiabao said downward pressure on the economy is still “relatively large” and the government will intensify fine-tuning of policies even as measures taken since April are helping to stabilize a slowdown.

Wen’s comments, four days after the central bank announced the second interest-rate cut in a month, were made during an inspection tour of eastern Jiangsu province, the official Xinhua News Agency reported yesterday. The premier also pledged to “unswervingly” continue property controls and prevent prices from rebounding, Xinhua said.

To contact the reporter on this story: Adam Haigh in Sydney at

To contact the editor responsible for this story: Nick Gentle at

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