Investors on Alert Due to Slowing Growth of Regional Economies and Decline on Wall Street

Asian markets are trading cautiously, with indices on track for weekly losses as the growth of regional economies slows and the S&P 500 index on Wall Street fell significantly yesterday.

The MSCI Asia-Pacific index was down 0.3 percent around 6:45 AM, heading for a weekly loss of about 1.5 percent. This morning, the Nikkei index on the Tokyo Stock Exchange slid 0.4 percent, while stock prices in Australia fell 0.2 percent. Indices in South Korea and Shanghai are stagnating, while in Hong Kong, the index rose 0.7 percent.

Asian investors are cautious as there are not many reasons to buy stocks, given that the growth of regional economies is slowing, as is that of the U.S., the largest export market for most Asian companies.

Investors were also disappointed by yesterday’s decline on Wall Street. Although the Dow Jones rose 0.5 percent, the S&P 500 slid 0.7 percent, and the Nasdaq index fell more than 2 percent.

The decline of the S&P 500 and Nasdaq is primarily due to pressure on the stocks of Netflix and Tesla, after these tech giants reported their quarterly business results. Tesla’s stock price plummeted nearly 10 percent, while Netflix’s fell more than 8 percent.

– The news from Netflix and Tesla is not the end of the world, but it gave investors a reason to question whether it was wise to buy those stocks at such high prices. Therefore, some investors decided to pull their money out of those stocks, says Ken Polcari, partner at Kace Capital Advisors.

On the other hand, the stock price of Johnson & Johnson surged more than 6 percent after the company reported its business results and raised its earnings estimates for this year. This is also the main reason for the Dow Jones index’s rise for the ninth consecutive day.

So far, 77 companies in the S&P 500 index have reported their business results, and most have exceeded analysts’ earnings estimates.

In a Reuters survey, analysts estimate that earnings for companies in the S&P 500 index fell 7.9 percent in the second quarter compared to the same period last year. However, at the beginning of the month, a decline of 5.7 percent was expected.

Dollar Strengthens, Oil Prices Rise

In the currency markets, the value of the dollar against a basket of currencies has slightly strengthened for the third consecutive day, rising about 1 percent since the beginning of the week.

The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 100.78 points this morning, while it was 100.03 points at the same time yesterday. Meanwhile, the dollar’s exchange rate against the Japanese currency rose from yesterday’s 139.20 to 139.95 yen.

The U.S. currency has also strengthened against the euro, with the euro price sliding to 1.1130 dollars, down from 1.1225 dollars at the same time yesterday.

Oil prices, on the other hand, have risen. The price of a barrel in the London market strengthened this morning by 0.73 percent to 80.20 dollars, while in the U.S. market, a barrel increased by 0.78 percent to 76.20 dollars.