Asian indexes were trading mostly lower on Wednesday even after a strongly positive day on Wall Street left the S&P 500 at a record high close. The index gained 0.91 percent for the day thanks to positive earnings reports. The Dow Jones Industrial Average and the NASDAQ also closed on solid footing. The positive earnings reports out yesterday reduced fears of a profit recession and increased optimism that additional strong earnings reports will be forthcoming during reporting season. The S&P 500 is up 17.5 percent this year and the NASDAQ is up over 22 percent for the year.
Still, the optimism did not spread across the ocean, where Asian indexes struggled to the downside. As of 2:03 p.m. HK/SIN, Japan’s Nikkei 225 had eased 0.44 percent, South Korea’s Kospi was down 1.31 percent, and Hong Kong’s Hang Seng Index was down 0.85 percent. China’s benchmark indexes were both trading lower, with the Shanghai Composite sliding 0.92 percent and the Shenzhen Composite down 0.47 percent. Only Australia’s ASX 200 bucked the trend, trading up 0.89 percent.
Trade Negotiations Continue
Top U.S. trade officials will be heading to China next week to continue with the trade negotiations, and specifically to focus on issues of forced technology transfer, intellectual property, non-tariff barriers and enforcement. A subsequent meeting will be held in Washington the following week.
According to predictions by Bank of America Merrill Lynch that were reported by CNBC, an outbreak of African swine flu in China may tip the negotiations in favor of the U.S., as China has lost more than 1 million pigs to the disease. China is the world’s biggest pork consumer and also the home to approximately half of the world’s pig population, and the loss of these animals is likely to raise prices, which would require China to negotiate cautiously, as the U.S. will likely be tempted to place tariffs on pork to force China’s hand.