Asian shares fall after Wall St slips on grim economical news

Shares fell in Asia on Friday after a crush of dismal data about the economy sent markets lower overnight in a meek ending to a historic, juggernaut month for stocks.

Most regional markets were closed for May Day holidays. But Japan's Nikkei 225 index slipped 2.8% to 19,619.35 while the S&P/ASX 200 in Australia quit 4.2% to 5,289.40.

The near future for the S&P 500 lost 1.7% while that for the Dow industrials quit 1.5%.

The S&P 500 fell 0.9% on Thursday after reports showed millions more U.S. personnel filed for unemployment benefits last week and the European economy crumpled to its worst performance on record last quarter, among other lowlights. It was the biggest loss for the U.S. currency markets in more than a week, but just a wiggle within the S&P 500’s 12.7% gain for April, its best month in decades.

“Maybe it was the complete month-end malaise, or maybe they simply need to hear something new and impactful, and that we’re eventually seeing buying fatigue," Chris Weston of Pepperstone said in a commentary.

Promises from the Federal Reserve and other central banks to accomplish whatever needs doing to prop up the economy through the coronavirus crisis have supported buying by investors betting that a recovery should come soon. Professional investors say that optimism may be premature.

“The rebound in April was an assumption that this was going to be considered a short, V-shaped recovery, both economically and at the corporate and business level,” said David Lyon, global investment specialist at J.P. Morgan Private Bank. “In our view, it probably has gotten just a little before itself. We think it’s likely to be considered a longer and slower recovery.”

The month’s gains for stocks came in the face of mayhem in the oil market, where prices in a single corner dipped below zero for the very first time, and as investors continued to rush into U.S. government bonds searching for safety. Reports piled-up by the day showing the severe hits the economy is taking from widespread stay-at-home orders designed to slow the spread of the virus.

U.S. benchmark crude picked up 46 cents to $19.30 per barrel in electronic trading on the New York Mercantile Exchange. It’s still way below the roughly $60 level where it started the entire year as worries accumulate about the consequences of a collapse in demand and as storage tanks fill near to their limits.

Brent crude, the international standard, gained 31 cents to $26.79 per barrel.

The deluge of dour economical data Thursday - along with some investors looking to sell after weeks of gains - was enough to send 86% of stocks in the S&P 500 down and European stocks sharply lower.

The S&P 500 fell 27.08 points to 2,912.43. The Dow Jones Industrial Average lost 1.2% to 24,345.72, and the Nasdaq fell 0.3% to 8,889.55.

The U.S. jobless figures brought the full total to 30 million in just six weeks, while consumer spending plunged an archive 7.5% in March from the last month. That’s crucial for an economy where consumer spending makes up 70% of the full total.

Among European countries that utilize the euro, the economy shrank by 3.8% in the first three months of the entire year from the quarter before in the largest contraction since records started in 1995. Discouraging data also came in on China’s economy, which is concerning for anybody expecting a first-in-first-out monetary wave.

“This is the saddest day for the global economy we've ever seen” in the 50 years that economists at High Frequency Economics have already been following financial data, they wrote in a written report. “The statistical offices of the economies we watch pumped out 19 monetary reports overnight. They revealed historic declines of activity and surging unemployment on a scale we've never seen before. We are sad.”

The yield on the 10-year Treasury edged right down to 0.61% from 0.63% late Thursday. It started the year near 1.90%. Treasury yields have a tendency to fall when investors are downgrading their expectations for the economy and inflation.

In currency trading, the dollar fetched 107.09 Japanese yen, down from 107.13 yen on Thursday. The euro rose to $1.0963 from $1.0955.