BANGKOK (AP) — Shares were mixed Thursday in Europe and Asia after a meeting between U.S. President Joe Biden and Chinese leader Xi Jinping that yielded no big breakthroughs, though both sides said it was constructive.
Any lift in sentiment from a meeting between U.S. President Joe Biden and Chinese leader Xi Jinping appeared to fade after Biden, pressed by a reporter on whether he trusted Xi, said he believed in trusting but verifying and conceded that China’s leader is a dictator.
“He is a dictator in a sense,” Biden said. A Chinese Foreign Ministry spokesperson, Mao Ning, said, “Such a remark is extremely wrong and is irresponsible political manipulation.”
Biden and Xi emerged from their first face-to-face meeting in a year vowing to stabilize the fraught relationship between the world’s two biggest economies. They showcased modest agreements to combat illicit fentanyl and re-establish military communications. Rifts on economic competition and global security threats persist, but Biden said they agreed to “pick up the phone” and talk if urgent issues arise.
Investors have grown cautious, also, over expectations that the Federal Reserve might be finished with interest rate hikes meant to curb inflation and over the assumption that it has succeeded in navigating a “soft landing” for the U.S. economy, analysts said.
“The concern is that markets are now overestimating the chances of full-on Fed accommodation,” Stephen Innes of SPI Asset Management said in a commentary.
Germany’s DAX rose 0.4% to 15,807.68, while the CAC 40 in Paris slipped 0.3% to 7,187.14. Britain’s FTSE 100 declined 0.4% 7,454.37. The future for the S&P 500 fell 0.1% while that for the Dow Jones Industrial Average was down 0.04%.
In Asian trading, Hong Kong’s Hang Seng lost 1.4% to 17,832.82 and the Shanghai Composite index dropped 0.7% to 3,050.93. Tokyo’s Nikkei 225 shed 0.3% to 33,424.41 and the Kospi in Seoul edged 0.1% higher, to 2,488.18.
In Australia, the S&P/ASX 200 sank 0.7% to 7,058.40.
Japan reported that its exports rose a meager 1.6% in October, down from a 4.3% increase in September, while its trade deficit shrank 70% thanks to a 12.5% decline in imports as oil prices fell. The figures augur further weakness for Japan’s export manufacturers after the economy contracted at a 2.1% annual rate in the July-September quarter.
Shares rose in India and Taiwan and were virtually unchanged in Bangkok.
On Wednesday, the S&P 500 rose 0.2% and the Dow industrials gained 0.5%. The Nasdaq composite edged up 0.1%.
Wall Street’s overall moves were tentative coming off its best day since April, when an encouraging report on inflation boosted investors’ hopes that the Federal Reserve may finally be done with its hikes to interest rates. That bolstered hopes the Fed can actually pull off the balancing act of getting inflation under control without causing a painful recession.
Halfway through November, the S&P 50 has already jumped 7.4%, which would make this its best month in a year if it does nothing else for two weeks.
Treasury yields rose Wednesday, retracing a bit of the steep drops from the day before that had helped stocks to rally so much. The yield on the 10-year Treasury climbed to 4.53% from 4.45% late Tuesday, adding some pressure onto financial markets.
Another report on inflation Wednesday came in lower than expected. Prices at the wholesale level were 1.3% higher in October than a year earlier, and they surprisingly fell from September’s levels. That breathed more life into hopes that inflation is indeed cooling enough for the Fed to halt its barrage of rate hikes.
A separate report showed sales at U.S. retailers fell 0.1% in October from September, holding up better than the 0.3% drop forecast by economists.
In other trading, U.S. benchmark crude oil gave up 18 cents to $76.48 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.60 to $76.66 on Wednesday.
Brent crude, the international standard, declined 16 cents to $81.02 per barrel.
The U.S. dollar fell to 151.25 Japanese yen from 151.38 yen. The euro climbed $1.0849 from $1.0848.
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