Australia

Australian shares are set to dip today following a poor session on Wall Street. Despite yesterday’s gains, investors continued to worry that a strong US economy will prolong the Fed’s fight against inflation.

ASX futures were down 80 points or 1.1% at 7083 as of 7:00am on Friday, indicating a loss at the open.

Stocks fell near the end of trade on Thursday, as economic data pointed to a strong labor market and faster economic growth than previously expected.

The S&P 500 tumbled 1.5%, the Dow Jones Industrial Average fell 1.1%, and the technology-focused Nasdaq Composite lost 2.3%. US markets had rallied Wednesday, fueled by signs of revived consumer confidence.

Stocks have been choppy in recent weeks. The Federal Reserve's message that it will keep raising interest rates to quell inflation and forecasts of a recession in 2023 have both weighed on the market.

Data showing consumer-price growth is slowing and suggesting the economy is resilient have sparked intermittent rallies. Complicating matters, a robust economy could keep inflation at high levels, encouraging the Fed to raise interest rates higher -- and keep them elevated for longer -- than many investors are hoping for.

In commodity markets, Brent crude oil slipped 0.84% to $US81.51 a barrel while gold lost 1.41% to US$1,788.81.

In local bond markets, the yield on Australian 2 Year government bonds climbed to 3.22% while the 10 Year rose to 3.79%. Overseas, the yield on 2 Year US Treasury notes dipped to 4.26% and the yield on 10 Year US Treasury notes declined to 3.67%.

The Australian dollar decreased from the previous close of 67.06 to hit 66.52 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged up to 97.51.

Asia

Chinese shares ended lower after briefly turning positive earlier in the day on improving market sentiment thanks to reopening optimism. The consumption sector and education related companies outperformed the market, as more supportive policies were issued to the latter industry in recent weeks. High-end liquor producer Kweichow Moutai rose 1.7% and vocational training firm Offcn Education Technology rose 10%--its daily limit. Chip makers were among the losers, with Naura Technology Group shedding 5.1%. The Shanghai Composite Index ended 0.5% lower at 3054.43, the Shenzhen Composite Index declined 0.7% and the ChiNext Price Index was 0.4% lower.

Hong Kong stocks ended higher, with most shares gaining as optimism about reopening in China resumes and Beijing turns toward a pro-growth stance. Although the world's second largest economy was hit by massive Covid outbreaks, "offering support for the private sector is more critical from a market perspective than for a near-term economic growth outlook," said Stephen Innes, managing partner SPI Asset Management. The benchmark Hang Seng Index rose 2.7% to settle at 19679.22. Tech and consumption-related companies led the gainers, with Meituan up 6.9% and Haidilao 7.6% higher. The Hang Seng Tech Index rose 4.6% and Hang Seng China Enterprises ended 3.3% higher.

Japanese stocks ended higher, led by gains in real estate and auto shares following recent selloffs, as concerns eased about higher costs of borrowing. The 10-year Japanese government bond yield fell nine basis points to 0.39%. Mitsui Fudosan gained 4.3% and Suzuki Motor added 3.0%. Toshiba Corp. climbed 4.3% following a report that banks are finalizing loan terms for a possible buyout proposed by a Japan Industrial Partners-led group. The Nikkei Stock Average added 0.5% to 26507.87.

Europe

European stocks dropped, with the FTSE 100 falling despite sterling losses as the UK GDP shrank 0.3% in the three months leading up to September--the worst Q3 growth in the G7, analysts said. The pan-European Stoxx Europe 600, the French CAC 40 and the German DAX each retreated 1% while the British FTSE 100 dropped 0.4% as the pound fell against the dollar and euro.

Inflation remains a "very real and present" economic danger for the UK, Principal Asset Management said. "With the economy contracting, interest rates rising and fiscal policy tightening, it's hard to see the bright side for the UK economy in 2023," Principal's chief global strategist, Seema Shah, wrote.

North America

Stocks fell near the end of trade on Thursday, as economic data pointed to a strong labor market and faster economic growth than previously expected.

The S&P 500 tumbled 1.5%, the Dow Jones Industrial Average fell 1.1%, and the technology-focused Nasdaq Composite lost 2.3%. US markets had rallied Wednesday, fueled by signs of revived consumer confidence.

Stocks have been choppy in recent weeks. The Federal Reserve's message that it will keep raising interest rates to quell inflation and forecasts of a recession in 2023 have both weighed on the market.

Data showing consumer-price growth is slowing and suggesting the economy is resilient have sparked intermittent rallies. Complicating matters, a robust economy could keep inflation at high levels, encouraging the Fed to raise interest rates higher -- and keep them elevated for longer -- than many investors are hoping for.

"Once central banks hit pause, as they will do at some point next year as inflation falls back, that will put some more vigor back into markets, " said Susannah Streeter, senior investment and markets analyst at UK brokerage Hargreaves Lansdown. Until then, she added, "that merry-go-round is going to be spinning."

Weekly data published Thursday showed 216,000 people filed initial claims for unemployment benefits last week, up 2,000 on the week before. Claims, a proxy for layoffs, have hovered around that level since May, a sign of continuing labor-market strength that could encourage the Fed to keep tightening monetary policy.