Evergrande Group failed to pay some of its offshore bondholders by a Monday deadline
Wall Street stocks reversed early gains to finish lower overnight as investor sentiment turned bearish ahead of the earnings season while surging oil prices added to concerns about inflation. Furthermore, Goldman cut its 2022 U.S. economic growth forecast to 4% from 4.4% while the 2021 estimate was revised from 5.7% to 5.6%. As such, the S&P 500 was down 0.69%, the Dow Jones fell 0.72% and the Nasdaq Composite shed 0.64%. The bond market was closed Monday for Columbus Day.
Following suit, Asian equities fell on Tuesday amid rising inflation concerns as oil prices surged to fresh long-term tops. Adding to a downbeat tone in the markets, China Evergrande Group failed to pay some of its offshore bondholders by a Monday deadline. Against this backdrop, Tokyo’s Nikkei 225 index lost nearly 1%, the Hang Seng in Hong Kong fell 1.43%, the Shanghai Composite index in China shed 1.25% and the S&P/ASX 200 in Australia slipped 0.26%.
European stocks opened lower today amid widespread risk aversion, with the pan-European STOXX 600 falling nearly 1% in early trading. On the data front, the U.K. added 207,000 jobs in September, taking payrolls to a record high. Later in the day, NFIB business optimism index and JOLTS job openings data from the US will be in the market focus.
In currencies, the dollar holds steady as investor sentiment turned sour, fueling the safe-haven demand for the greenback. Earlier in the day, the index faded part of yesterday’s advance but stayed close to yearly highs and could stage a fresh rally in the coming days if the US inflation data surprises on the upside.