Asian shares start week lower, tracking Wall St retreat

The US economy is slowing but healthy hiring shows it is not yet in recession, Treasury Secretary Janet Yellen said Sunday on NBCs Meet the Press. She spoke ahead of the release this week of a slew of economic reports that will shed light on an economy currently besieged by rampant inflation as interest rates rise.

Asian shares opened mostly lower on Monday after a retreat on Wall Street spurred by disappointing economic data and corporate earnings. Oil prices also slipped. Investors are awaiting the next move by the US Federal Reserve, which is expected to raise its key interest rate again on Wednesday as it strives to beat back inflation.

The Fed will likely announce its second 0.75 percent point increase in its short-term rate in a row, a hefty increase that it hasn't otherwise implemented since 1994. That will put the Fed's benchmark rate in a range of 2.25 percent to 2.5 percent, the highest level since 2018. The US economy is slowing but healthy hiring shows it is not yet in recession, Treasury Secretary Janet Yellen said Sunday on NBC's “Meet the Press.” She spoke ahead of the release this week of a slew of economic reports that will shed light on an economy currently besieged by rampant inflation as interest rates rise. The highest-profile report will likely be Thursday when the Commerce Department will release its first estimate of the economy's output in the April-June quarter. Some economists forecast it may show a contraction for the second quarter in a row. The economy shrank 1.6 percent in the January-March quarter. Two straight negative readings are considered an informal definition of a recession, though in this case, economists think that's misleading. Similar data from Europe have underscored the weakness of the global economy as central banks jack up interest rates. Higher rates make economic conditions more difficult, and too-aggressive hikes could cause a recession. “While rising jobless claims, softer home sales, and a buildup in gasoline inventory show the Fed front-loading rate hikes are causing a slowdown and bringing inflation under control, the issue is at what cost,'' Stephen Innes of SPI Asset Management said in a commentary.

On Monday in Asia, Tokyo's Nikkei 225 gained 0.8 percent to 27,678.94 and the Kospi in Seoul added 0.3 per ce to 2,400.38. Hong Kong's Hang Seng declined 0.7 percent to 20,465.69, while the Shanghai Composite index gave up 0.3 percent to 3,260.74.

In Australia, the S&P/ASX 200 edged 0.1 percent lower to 6,784.00. On Wall Street on Friday, the benchmark S&P 500 lost 0.9 percent to 3,961.63, breaking a three-day rally that had carried it to its highest level in six weeks. The Dow Jones Industrial Average declined 0.4 percent to 31,899.29. It held up better largely because constituent American Express gave an encouraging earnings report and said its cardholders were spending more. The Nasdaq sank 1.9 percent to 11,834.11 following worse-than-expected profit reports from Snap, Seagate Technology, and other tech-oriented companies. The company behind the Snapchat app tumbled 39.1 percent after it reported a worse loss and lower revenue for the spring than Wall Street had forecast. On Friday the two-year Treasury yield tumbled again, to 2.98 percent from 3.09 percent late Thursday and 3.14 percent a week ago, on worries about the economy. A report Friday morning indicated US business activity may be shrinking for the first time in nearly two years, with service industries particularly weak.

Despite Friday's declines on Wall Street, the S&P 500 still rose 2.5 percent for the week. Besides the easing of Treasury yields through the week, dropping prices for crude oil and other commodities also provided some relief on the inflation front, raising hopes that inflation may be peaking.

Early Monday, US benchmark crude oil lost 64 cents to USD 94.06 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the pricing basis for international trading, shed 97 cents to USD 97.41 per barrel. The dollar slipped to 136.13 Japanese yen from 136.27 yen on Friday. The euro weakened to USD 1.0210 from USD 1.0214.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)