Asian stocks sink after Wall St tumbles on Fed rate jitters

The S&P 500 has gained 1.5% to 2,158.62 at 2:59 p.m. today, while the Dow Jones Industrial Average has risen 236.26 points, or 1.3%, to 18,321.71. That helped take technology stocks higher.

Today’s speech by Brainard, only announced late last week, follows Friday’s comments by Boston Fed President Eric Rosengren who warned that the central bank might risk overheating the U.S. economy if it waited too long before raising rates again. Benchmarks in Taiwan, Thailand and New Zealand also fell.

KEEPING SCORE: In Europe, Germany’s DAX was down 1.9 percent at 10,363 while the CAC-40 in France fell 1.9 percent to 4,407. Contracts on Hong Kong’s Hang Seng Index added 0.8 per cent and contracts on the Hang Seng China Enterprises Index, which tracks mainland Chinese shares listed in the city, climbed 1.1 per cent. FTSE China A50 Index futures rose one per cent.

Rosengren’s comments drew so much attention because he is considered a “dove” who has been reluctant to raise rates too quickly.

In Europe, markets are modestly higher at midday, boosted by lower prospects of a US interest rate hike in September. The probability of a September rate hike by the Fed dropped by eight percentage points on Monday to 22 per cent, futures prices indicate.

THE QUOTE: David Kelly, chief global strategist for JPMorgan Funds, said he thinks Federal Reserve policymakers seem “noncommittal” and aren’t sure if they should raise interest rates next week or not. Starboard Value said Perrigo needs to boost profit margins for some of divisions, and notes that the company’s stock hasn’t done well since Perrigo rejected an offer from competitor Mylan NV. I suspect this commentary we’ve seen in recent days is indicative of the fact that there are debates going on within the central bank and differing views of what they should do.

Crude-oil futures slumped 1.8% (http://www.marketwatch.com/story/oil-futures-reverse-gains-ahead-of-weekly-supply-data-2016-09-13) to $45.45 a barrel on Tuesday following the IEA report, while Brent futures fell 1.2% to $47.72 a barrel. Brent crude, the benchmark for global oil trading, lost 88 cents to $47.44 a barrel in London.

“With a number of dissenting voices.the future is still unclear, and it remains to be seen if investors have the desire to push markets higher amid the backdrop of political and economic uncertainty”, said Andy McLevey, head of dealing at stockbroker Interactive Investor, in a note. Natural gas jumped 12 cents, or 4.2 percent, to $2.92 per 1,000 cubic feet. But the federal government temporarily stopped the project and several agencies said they will reconsider some of their decisions. The Standing Rock Sioux tribe wants to stop construction of the pipeline, which comes within a mile of a reservation in southern North Dakota.

OTHER ENERGY PRICES: Wholesale gasoline gained 3 cents to $1.39 a gallon.

Gold is edging higher (+0.1% at $1,328.50 an ounce) after Fed Brainard’s dovish comments have reduced prospects of Fed hike next week. The economy expanded at an unimpressive 1.1 percent annual pace from April through June after growing just 0.8 percent in the first quarter and 0.9 percent in the fourth quarter of 2015. The pound (£1.3262) is under some pressure after United Kingdom data this morning showed inflation picking up last month, but not as much as the market had expected.

Until Friday, the US dollar, however, had accumulated a depreciation of 1.87 percent in relation to the Brazilian currency, and a depreciation of 16.92 percent since January.