Asia-Pacific markets trade mixed ahead of Fed rate decision

Soegeefx AppsAsia MarketAsia-Pacific markets trade mixed ahead of Fed rate decision

Abigail Ng

Shares in the Asia-Pacific were mixed on Wednesday as investors brace for another likely 75-basis-point rate hike by the Federal Reserve.

In Japan, the Nikkei 225 fell 0.11% and the Topix was 0.11% higher. Fast Retailing is set to report sales for Uniqlo in Japan.

The Kospi in South Korea lost 0.19% and the Kosdaq was 0.58% lower. South Korea’s inflation inched higher to 5.7% in October, higher than 5.6% forecasted by analysts in a Reuters poll.

Australia’s S&P/ASX 200 traded 0.15% higher, bucking the trend in the region. The MSCI’s broadest index of Asia-Pacific shares outside Japan was about flat.

.N225 Nikkei 225 Index *NIKKEI 27617.78 -61.14 -0.22
.HSI Hang Seng Index *HSI 15455.27 0 0
.AXJO S&P/ASX 200 *ASX 200 6990 13.1 0.19
.SSEC Shanghai *SHANGHAI 2969.2 0 0
.KS11 KOSPI Index *KOSPI 2326.29 -8.93 -0.38
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 6909.14 -14.33 -0.21

U.S. stocks slipped overnight as investors digested economic data ahead of an expected rate hike from the Fed later Wednesday. The Dow Jones Industrial Average shed 79.75 points, or 0.24%, to 32,653.20, while the S&P 500 lost 0.41% to 3,856.10. The Nasdaq Composite was 0.89% lower at 10,890.85.

Stocks close lower

Stocks finished lower as markets prepared for another Fed rate decision due out Wednesday.

The Dow Jones Industrial Average fell 79.75 points, or 0.24%, to 32,653.20, while the S&P 500 slid 0.41% to 3,856.10. The Nasdaq Composite shed 0.89% to 10,890.85.

— Samantha Subin

A Fed pivot is far off, says New York Life’s Goodwin

Investors may be getting a bit too excited about potential changes from the Federal Reserve, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

Goodwin said in a note that she expected the Fed to hike by 0.75 of a percentage point on Wednesday and half a point in December, but that the slowdown should not be seen as the start of a big shift from the central bank.

“A Fed pause is not the same as a pivot. Certainly, deteriorating economic and credit conditions could cause the Fed to pivot modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a note.

Goodwin pointed out that the first rate hikes should now start to show their impact across the broad economy, instead of just housing. However, the Fed will need several months of data to go its way before changing course.

“At this point, with inflation surprising as much as it has already, the Fed will want to see clear signs of reversal in wage growth before pivoting. Recession should be considered a base case rather than a risk,” Goodwin said.

— Jesse Pound

Source : CNBC

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