Stocks in Asia Were Mixed Ahead of U.S. Inflation Data

Stocks in Asia-Pacific were mixed on June 24, trading in a narrow range as investors awaited the new U.S. inflation data. Tokyo, as well as Shanghai, were unchanged, while Seoul and Hong Kong advanced. Sydney dropped following a listless day of trading on Wall Street.

Fresh data on inflation will come on June 25 with the release of the Federal Reserve’s preferred gauge. The data will cover May when the consumer price index saw year-over-year inflation of 5%.

The U.S. futures were higher after a bipartisan group of U.S. senators proposed a modified plan for $559 billion in new infrastructure spending that could open the door to President Joe Biden’s more sweeping $4 trillion proposals. Joe Biden invited members of the group to the White House on Thursday to discuss the $953 billion infrastructure plan.

Let’s get back to the stocks in Asia-Pacific. Mainland Chinese stocks closed mixed as the Shanghai composite ended the trading day largely flat at around 3,566.29. The Shenzhen component dropped 0.398% to 14,784.90. In Hong Kong, the Hang Seng index added about 0.2%, as of its final hour of trading.

In Japan, the Nikkei 225 was flat at 28,875.23. At the same time, the Topix index dropped 0.1% to end its trading day at 1,947.10.

South Korea’s Kospi index advanced 0.3% on the day to 3,286.10. Meanwhile, the S&P/ASX 200 in Australia fell 0.32% to 7,275.30.

U.S. stocks on June 23

On June 23, the S&P 500 dropped 0.1% to 4,241.84 after meandering between very modest gains and losses. The S&P 500 is 0.3% below its record high set a week and a half ago.

The Dow Jones Industrial Average declined 0.2% to 33,874.24. The Nasdaq Composite added to its record set one day earlier, inching up 0.1% to 14,271.73.

Most stocks in the S&P 500 declined, but gains for financial companies and others that do best when the economy is healthy helped limit the losses.

If higher inflation continues, the Federal Reserve will have to get more aggressive about raising rates. However, before that, the central bank will most likely have to reduce the bond purchases it’s making to keep longer-term interest rates low.

Then the Federal Reserve will actually begin tapering, before ending tapering and then signaling that a rate hike is coming. In the meantime, the world’s largest economy continues to roar higher, and corporate profits are soaring.