Asian Equities Mixed After US Markets Edged Lower

Following a slight sell-off in the U.S. stock market, shares in Asia are giving mixed signals on Wednesday, Oct. 16. Hong Kong stocks climbed, while Tokyo and Sydney equities have dipped slightly. The Shangai Composite Index FXI was up slightly at 0.07%, as of 10:30 p.m. EST.

What Happened

The S&P 500 Index in the U.S. edged lower by 0.20% on Wednesday, while the Dow Jones Industrial Average dipped by 0.084%. The weakness in U.S. equities came around retail sales in the country unexpectedly declined in September, the first dip in seven months.

Why It Matters

The fall in retail sales intensifies fears that the slowdown in the U.S. manufacturing sector has started spreading into the broader economy. The United States Commerce Department said Wednesday that American households cut there spending on online purchases, building material and particularly automobiles in September.

This led to a 0.3% drop in the country’s retail sales, compared to the 0.3% increase that economists polled by Reuters predicted.

What's Next

The decline in the American retail market, coupled with the lingering trade dispute between the U.S. and China, increases the likelihood of a further interest rate cut. The U.S. Federal Open Market Committee, the Federal Reserves’ monetary policy committee, is expected to meet later this month.

In Europe, the British pound strengthened the euro as positive signs emerge that the United Kingdom is getting closer to a Brexit deal.

The Australian dollar also strengthened after the unemployment rate in the country unexpectedly dropped.