Asian trade: Asian markets are trading lower for the first time in the last few days, following the U.S. equity markets. Yesterday, a report showed the U.S. economy shed a huge number of jobs, much more than expected, raising again questions about the state of the economy.
The ADP report showed yesterday the U.S. economy lost 693K jobs, the most on record. The released number even surpassed the grimmest forecasts, which were calling for a 550K jobs lost in December. Declines were widespread to every sector of the economy. By far, the most affected was the service industry, which lost 473K, while the manufacturing industry lost 220K. With the December numbers, the U.S. economy has lost around 1 million jobs in the last quarter of 2008. Such decline in the employment number throws some question marks regarding the Q4 GDP estimations.
Tonight, the Nikkei declined for the first time in the last seven days. The Japanese benchmark fell 213.50 points (2.30%) to 9,026.74. The Australian S&P/Asx also declined 96.40 points (2.55%) to 3,683.70 as commodities posted some huge losses on lower consumption estimations.
Crude oil tumbled a strong number of pips lately, after the ADP report. Crude oil for January delivery fell $0.20 to $42.60.
Gold posted some small gains in the Asian session. Bullion for immediate delivery gained $6.50 to $844.75.
Previous Wall Street trade: U.S. equity markets declined sharply on Wednesday following a report from Applied Data Processing which showed the economy lost 693,000 non-farm jobs in December and as traders grew more concerned regarding corporate profits over the next several quarters.
Profit warnings from Alcoa, Intel and Time Warner hurt sentiment and likely portend falling profits through at least the second quarter, if not longer. Consumer areas are expected to be hardest hit as the job market worsens but other sectors are likely to feel the sting of lower earnings as the economy contracts during 2009. The non-partisan Congressional Budget Office said today the economy will likely contract 2.2% during the year and projected a record $1.6 trillion budget deficit in fiscal 2009; yesterday, minutes of the Fed's Dec. 16 meeting revealed that policy makers expressed concerns over whether balance sheet expansion (quantitative easing) would be successful in mitigating what looks to be the worst slowdown in the post-war period.
Previous European trade: In Europe, the U.K. Ftse fell 131.41 points (-2.83%) to 4,501.17, while the German Dax lost 88.84 points (-1.77%) to 5,937.47.