Stocks slid along with US equity futures as disappointing results from tech giants soured sentiment and marred a tentative recovery in equities. Treasuries slumped, with benchmark yields topping 4%.
(Bloomberg) — Stocks slid along with US equity futures as disappointing results from tech giants soured sentiment and marred a tentative recovery in equities.
Treasuries slumped, with benchmark yields topping 4%.
Contracts on the tech-heavy Nasdaq 100 paced losses, slumping more than 1% on Amazon.com Inc.’s plunge after hours as its sales forecast trailed estimates.
S&P 500 futures and the Stoxx Europe 600 pared earlier losses but remained as much as 0.7% lower.
“We are starting to see some companies’ bleeding in terms of forecasts and unfortunately we’re starting to see the big caps in the market disappointing,” Banque Syz CIO Charles-Henry Monchau said in an interview with Bloomberg TV.
“Earnings for us is still a headwind.”
Despite the downturn, the S&P 500 is heading for a second week of gains for the first time since August.
The 10-year benchmark Treasury yield surpassed 4% as a rally in government bonds began to fizzle.
Government bonds posted strong gains in recent days amid hopes that policymakers are preparing a downshift in aggressive rate hikes amid softer economic data.
The ECB delivered a second straight 75 basis-point hike on Thursday but dropped a prior reference to rate increases continuing for “several meetings,” an outcome that was considered dovish.
The Bank of Japan held its negative rate Friday, 10-year yield cap and asset purchases at the end of a two-day policy meeting Friday.
The result was in line with the view of 49 economists surveyed by Bloomberg.
Economists still expect the Federal Reserve to hike by three-quarters of a percentage point for the fourth time in a row next week, and tighter policy is starting to crimp corporate earnings.
Amazon shares plunged almost 20% in extended trading before paring losses, after the tech giant projected sluggish sales for the holiday quarter.
Apple Inc. was steady in post-market trading after posting weaker-than-expected iPhone and services sales for its latest quarter.
Chinese assets also remained in focus, with foreign investors dumping a record amount of mainland China stocks this week and sending Hong Kong equities to a 13-year low.
President Xi Jinping’s tightening grip on power hasn’t had the same impact domestically, with mainland investors hunting for bargains in Hong Kong.
Oil pared its weekly gain as investors shied away from risky assets on a dimming outlook for China and the wider global economy.
West Texas Intermediate slid below $88 a barrel.
Key events this week:
- US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 fell 0.6% as of 10:51 a.m.
London time
- Futures on the S&P 500 fell 0.7%
- Futures on the Nasdaq 100 fell 1.2%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The MSCI Asia Pacific Index fell 1.7%
- The MSCI Emerging Markets Index fell 1.6%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro was little changed at $0.9958
- The Japanese yen fell 1% to 147.73 per dollar
- The offshore yuan fell 0.3% to 7.2729 per dollar
- The British pound fell 0.3% to $1.1532
Cryptocurrencies
- Bitcoin fell 1% to $20,191.14
- Ether fell 1.4% to $1,506.93
Bonds
- The yield on 10-year Treasuries advanced nine basis points to 4.01%
- Germany’s 10-year yield advanced 16 basis points to 2.12%
- Britain’s 10-year yield advanced nine basis points to 3.49%
Commodities
- Brent crude fell 1.1% to $95.87 a barrel
- Spot gold fell 0.9% to $1,648.98 an ounce
–With assistance from Michael Msika, Kurt Schussler and Allegra Catelli.
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