Sunset scene of light trails traffic speeds through an intersection in Gangnam center business district of Seoul at Seoul city, South Korea
Mongkol Chuewong | Moment | Getty Images
Asia-Pacific markets traded mixed Thursday, after private sector hiring in the U.S. hit its lowest level in over two years, raising concerns that trade policy uncertainty could be weighing on the world’s largest economy.
A report from payrolls processing firm ADP showed that payrolls rose only 37,000 for the month, less than the downwardly revised 60,000 in April and below the consensus forecast of 110,000 that economists polled by Dow Jones had forecast.
South Korean markets extended gains from the previous session, with the benchmark Kospi advancing 1.72%, while the small-cap Kosdaq rose 1.12%.
Japan’s benchmark Nikkei 225 moved down 0.12%, while the broader Topix index lost 0.64%
Australia’s S&P/ASX 200 was flat.
Hong Kong’s Hang Seng index added 0.84% while mainland China’s CSI 300 was flat.
Investors will be keeping a close watch on Indian markets as the Reserve Bank of India starts its two-day policy meet, with markets expecting the central bank to cut its benchmark interest rate by a quarter-percentage point to 5.75% on Friday.
— CNBC’s Pia Singh, Sean Conlon and Sarah Min contributed to this report.
Dalio warns against trying to lower interest rates ‘unnaturally’
Bridgewater founder Ray Dalio said on “Squawk on the Street” that the U.S. government debt situation is “urgent” but that lowering interest rates will not necessarily help ease the situation.
“You can’t unnaturally lower interest rates without a negative consequence. … You don’t get richer by lower interest rates or printing money,” Dalio said.
One of the consequences of higher Treasury yields is that new debt issued by the U.S. government has higher annual payments than the bonds issued during low-yield periods.
Dalio also said that we are moving into a period of “greater than normal risk” and that investors should have a diversified portfolio while generally de-emphasizing debt assets. That could include 10% to 15% of a portfolio in gold, Dalio said.
“I think it’s going to be a good asset, but it also is a diversifying asset,” he added about gold.
The hedge fund manager is currently promoting his new book titled “How Countries Go Broke: The Big Cycle”
— Jesse Pound
