The Japan Times - Stocks slide as investors weigh data, interest rate cuts

The lack of US data and the ongoing government shutdown is starting to make investors nervous, said Chris Beauchamp, chief market analyst at investing and trading platform IG.

Investors and policymakers alike have been left in a fog as the shutdown of much of the US government has delayed the release of key data on employment, trade, retail sales and others.

"Financial markets find themselves groping around in the dark, a point echoed by FOMC member Goolsbee, who remains nervous about cutting rates without data to go on," said Beauchamp

Chicago Federal Reserve President Austan Goolsbee, who has been supportive of lowering interest rates, told CNBC in an interview that making cuts amidst a lack of data on inflation made him "uneasy".

Investors still see the US Federal Reserve cutting interest rates at its next meeting in December.

With key economic data produced by the US government unavailable due to the shutdown, investors have been turning to private data sources.

A report by outplacement firm Challenger, Gray & Christmas said the number of layoff announcements in October hit the highest level in 22 years.

The report "painted a grim picture of the jobs market" said Joe Mazzola, head trading and derivatives strategist at Charles Schwab brokerage.

The report found that this year has been the worst for layoffs since 2020, when the labour market was decimated by the pandemic, and that hiring has slowed to a 14-year low.

However the report "bolstered the case for a Federal Reserve rate cut in December despite Chairman Jerome Powell's unexpectedly hawkish tone following the Fed meeting last month," Mazzola added.

The Challenger report followed a stronger-than-expected report from payrolls firm ADP on Wednesday that showed private employers in the United States added jobs in October for the first time since July.

Investors were also digesting news that a majority of the US Supreme Court was sceptical about the legality behind a swath of Trump's sweeping tariffs, which also lent support to equities.

"Is it good news? Paradoxically, not really," said Swissquote Bank senior analyst Ipek Ozkardeskaya.

"It brings uncertainty, renewed volatility, potentially more than $100 billion in refunds the US government may owe to other countries according to Bloomberg, and a deeper fiscal deficit," she said.

Investors were also reacting to the Bank of England's decision, in a tight vote, to keep its key interest rate unchanged before the UK's Labour government presents its budget this month.

Weighing on European sentiment were some poorly received company earnings and official data that showed industrial production in Germany rebounded less than expected in September.

Shares in Franco-Dutch group Air France-KLM plunged more than 14 percent after it reported a drop in third-quarter net profit.

In New York, shares in chip-maker Qualcomm fell more than five percent despite a positive earnings report.

Tesla shares were down more than four percent ahead of a vote by shareholders on a pay package for Elon Musk that could reach as much as $1 trillion.

- Key figures at around 1630 GMT -

New York - Dow: DOWN 0.9 percent at 46,889.30 points

New York - S&P 500: DOWN 1.0 percent at 6,731.89

New York - Nasdaq Composite: DOWN 1.6 percent at 23,132.97

London - FTSE 100: DOWN 0.4 percent at 9,735.78 (close)

Paris - CAC 40: DOWN 1.4 percent at 7,964.77 (close)

Frankfurt - DAX: DOWN 1.3 percent at 23,734.02 (close)

Tokyo - Nikkei 225: UP 1.3 percent at 50,883.68 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 26,485.90 (close)

Shanghai - Composite: UP 1.0 percent at 4,007.76 (close)

Euro/dollar: UP at $1.1538 from $1.1488 on Wednesday

Pound/dollar: UP at $1.3106 from $1.3048

Dollar/yen: DOWN at 153.11 yen from 154.13 yen

Euro/pound: DOWN at 88.04 pence from 88.40 pence

Brent North Sea Crude: DOWN 0.4 percent at $63.30 per barrel

West Texas Intermediate: DOWN 0.5 percent at $59.28 per barrel

burs-rl/jj

Y.Ishikawa--JT