China property stocks drop after housing ministry briefing; most Asia-Pacific markets slip
SINGAPORE 一 Most Asia-Pacific markets fell Thursday after a briefing from China’s housing ministry failed to impress investors, sending the country’s property stocks tumbling.
The CSI 300 real estate index — which had gained over 5% on Wednesday — fell nearly 8%, while the benchmark CSI 300 declined 1.13% to 3,788.22.
Hong Kong’s Hang Seng index was down 1.3% at 20,030 as of its final hour of trade.
Japan’s Nikkei 225 slipped 0.69% to close at 38,911.19, while the broad-based Topix was down 0.11% to end at 2,687.83 after Japanese export and import growth in September missed expectations.
South Korea’s Kospi ended marginally lower at 2,609.30, while the small-cap Kosdaq slipped 0.1% to 765.79.
Australia’s S&P/ASX 200 rose 0.86% to end trading at 8,355.9.
— Dylan Butts
European markets open higher
European stocks were slightly higher shortly after Thursday’s opening bell.
The pan-European Stoxx 600 traded up nearly 0.2%, with most sectors in positive territory.
— Sam Meredith
Small-cap benchmark closes at highest level since 2021
The Russell 2000 outperformed on Wednesday, notching its highest closing level in nearly three years.
The small-cap benchmark added 1.64%, posting its fourth straight winning session and its highest close since November 2021.
These smaller names are expected to put on a strong showing as the Federal Reserve lowers interest rates. These companies, which are sensitive to economic cycles, tend to rely on financing, and lower rates would reduce their borrowing costs.
The Russell 2000 over the past five trading days
“With the growth outlook recently improving – underpinned by better-than-feared labor market conditions – and increased visibility into Fed rate cuts, the [Russell 2000] has rallied off the lower end of its rising price channel,” said LPL Financial chief technical strategist Adam Turnquist in a note.
The rally among banking names has also boosted the small-cap benchmark, as it’s the Russell 2000’s largest sector by weighting, he said.
–Darla Mercado, Chris Hayes
Weak back-to-school spending may be a warning sign for holiday shopping
If back-to-school spending sets the tone for the holiday shopping season, there’s good reason to be cautious, according to Barclays. The firm’s latest look at the U.S. consumer noted the deep divides between households with incomes of $100,000 or less and wealthier cohorts as well as steep discounting. While the firm said spending remains healthy, demand has been choppy.
Lower income consumers remain pressured as wages have not kept up with inflation, the firm said. Meanwhile, higher income households may be feeling a “wealth effect” from rising investment portfolios and inflated home values.
“Retailers that are clean on inventory and able to maintain store traffic should do fine, but we expect downside from those that are not,” Hale Holden, wrote in a research note. “In many ways this strikes us a return to 2018 or 2019 base trends.”
Barclays retail analyst Adrienne Yih picked Foot Locker, VF Corp and Victoria’s Secret as three stocks that will benefit as their margins recover late in the cycle over the next two to four quarters. All three stocks have vastly underperformed the market, with Foot Locker shares down cratering 20% year to date.
Victoria’s Secret’s stock jumped 6.6% Wednesday after its iconic fashion show returned.
—Christina Cheddar Berk
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading:
Discover Financial — Shares inched lower by 1%. The financial services company posted third-quarter results that surpassed expectations, with earnings of $3.69 per share on $4.45 billion of revenue. Analysts polled by LSEG were calling for earnings of $3.42 per share and revenue of $4.35 billion.
CSX — The rail transportation company lost 4% after third-quarter results fell short of Wall Street’s forecasts. CSX reported earnings of 46 cents per share on revenue of $3.62 billion, while analysts polled by LSEG anticipated 48 cents per share in earnings and revenue of $3.67 billion. Overall volumes were up 3% from the year-ago period, but revenue per unit was down about 1%.
Lucid Group — The electric vehicle maker slid 10% after announcing a public offering of more than 262 million shares. Lucid also said Ayar Third Investment Company, an affiliate of the Public Investment Fund, indicated it would buy more than 374 million shares.
The full list can be found here.
— Hakyung Kim
Stock futures are flat Wednesday
U.S. stock futures opened little changed on Wednesday.
Dow Jones Industrial Average futures were marginally lower. S&P 500 futures and Nasdaq 100 futures inched down 0.05% and 0.08%, respectively.
— Hakyung Kim