Asia markets fall after Wall Street investors further assess signals of slowing growth

Gold prices have remained above $2,000 for a third straight day as investors see increasing risks of a recession, especially with U.S. job growth slowing.

The yellow metal traded at $2,011.54 per ounce on Thursday, after having breached the $2,000 mark on Tuesday to reach its highest level since October 2020.

China’s service sector activity continued to expand in March, according to the latest Caixin services purchasing managers’ index that rose to 57.8.

The reading marks the fourth month of acceleration and above the 50-point mark that separates growth from contraction.

It also reached the highest reading since June 2020, when the reading reached a peak of 58.4.

The increase in activity was supported by a sustained and sharper rise in new business, Caixin said in its release.

– Jihye Lee

Oil prices fell after Saudi Arabia raised the prices for its flagship crude for Asian buyers for the third straight month, Reuters reported.

The comes after prices jumped the most in nearly a year after OPEC’s surprise output cut over the weekend.

Brent Crude futures fell 0.68% to $84.33 a barrel and West Texas Intermediate crude inched 0.66% lower to $80.08 a barrel.

– Jihye Lee

Electronics contract manufacturer Foxconn reported better sales for the first quarter of 2023, but was less bullish in its outlook for the second quarter.

Foxconn, which is also known as Hon Hai Precision Industry, recorded revenue of NT$1.46 trillion ($48 billion) for the first quarter of 2023, up 3.87% year-on-year.

However, the company said its outlook for the second quarter will be weaker due to two factors.

These are the seasonal off-peak period as new and old products transition, as well as a high base “from an unseasonally strong pull-in in the first half of last year,” Foxconn said.

Foxconn was also recently in the news after its founder Terry Gou announced his intention to run for Taiwan’s presidency.

India’s central bank is expected to raise its repurchase rate from 6.5% to 6.75%, making this its eighth straight increase.

According to a Reuters poll of 60 economists, 47 are expecting a rate hike, while the remainder expect a pause.

The repurchase rate, or repo rate, is the rate at which the Reserve Bank of India lends money to commercial banks or financial institutions in India against government securities. 

The country held its repo rate at a five year low of 4% in May 2020, until it initiated hikes in April 2022.

— Lim Hui Jie

Recent banking turmoil in the U.S. and Europe has been a source of panic, but analysts are pointing to a pocket of opportunity.

Investors can enjoy high yields in this type of investment, some are at highs and hovering at nearly 8%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

The U.S. services sector slipped closer to contraction in March due to sharp declines in new orders, exports and prices.

The ISM Services index declined to 51.2%, representing the level of businesses reporting expansion. A reading below 50% represents contraction, a level that index last saw in December. Economists had been looking for 53.8%, according to Dow Jones. February’s reading was 55.1%.

New export orders plunged 18 percentage points to 43.7, new orders tumbled 10.4 points to 52.2 and imports fell 9 points to 43.6. The prices sub-index showed inflation cooling some, as it dropped 6.1 percentage points to 59.5.

The ISM Manufacturing index is well in contraction level, with a reading Tuesday of 46.3% for March.

—Jeff Cox

The U.S. trade deficit rose more than expected in February as exports posted a sharp decline, the Commerce Department reported Wednesday.

The trade imbalance increased to $70.5 billion for the month, up $1.9 billion from January and more than the Dow Jones estimate.

Exports fell to $251.2 billion, a 2.7% decline, as industrial supplies, autos, consumer goods and capital goods all decreased. Imports fell by $5 billion.

As exports add to GDP and imports subtract, the numbers suggest economic growth could be weaker than expected in the first quarter. The Atlanta Federal Reserve’s GDPNow tracker is pointing to a gain of just 1.7% for the period, down from 3.5% less than two weeks ago.

—Jeff Cox

A strong first quarter for stocks has raised hopes of a new bull market. But David Dietze, managing principal at Peapack Private Wealth Management, says that could be wrong and inflation is still the biggest headwind.

He added that investors should remain invested in the stock market.

Pro subscribers can read more here.

— Zavier Ong

Treasury yields gave up their gains and turned red for the day after a weak labor market reading from the ADP private payrolls report.

The 2-year Treasury yield fell 8 basis points to 3.751%. The 10-year yield fell more than 3 basis points to about 3.3%.

Yields move opposite of price.

— Jesse Pound

Private company hiring fell sharply in March and was well below expectations, according to a report from payroll processing firm ADP.

Payrolls rose by just 145,000 for the month, down from 261,000 in February and below the Dow Jones estimate for 210,000.

Losses in financial activities, profession and business services and manufacturing pushed the total lower. Leisure and hospitality, trade, transportation and utilities and construction led hiring.

The numbers come ahead of Friday’s nonfarm payrolls report, which is expected to show a gain of 238,000.

—Jeff Cox