Stock Selloff Deepens Ahead of Nvidia, Jobs Data: Markets Wrap
(Bloomberg) — Asian stocks declined at the open after Wall Street’s slide, as investors moved away from riskier assets ahead of Nvidia Corp.’s earnings and a key US jobs report later this week.
A gauge of Asia-Pacific shares extended its losses to a third day after the S&P 500 dropped 0.9% and the Nasdaq 100 shed 0.8%. Amid the weak sentiment, MSCI’s global stock gauge traded at a one-month low, while Bitcoin held its losses after falling to the lowest level since April.
The moves underscored the mood of uncertainty around interest rates and tech earnings. Nvidia’s report Wednesday will come amid investor uneasiness about lofty AI valuations even though the chipmaker is expected to deliver another earnings beat. Then there’s the September jobs report, which will be released Thursday after a delay due to the US shutdown.
“The monthly jobs report would normally dominate this week’s economic calendar, but with the AI trade struggling the past couple of weeks, Nvidia’s earnings are once again looking like a key piece of the market’s momentum puzzle,” said Chris Larkin at E*Trade from Morgan Stanley.
In other corners of the market, gold edged lower and oil steadied as investors weighed the impact from an emerging surplus against US sanctions on Russia that have upended some crude flows. An index of the dollar held its gains from the prior session.
Bitcoin traded around $92,000 after a decline that erased its gains for the year. An index which tracks the 50 smallest digital assets in a basket of 100 fell to its lowest level since November 2020 on Sunday.
What Bloomberg Strategists say…
The artificial intelligence narrative is starting to look less convincing for investors who are questioning the big-spending industry’s ambition. Nvidia’s quarterly earnings Wednesday offer the next chance to scrutinize AI and, if recent history is any guide, traders will treat it as an excuse to take profit.
— Sebastian Boyd, Macro Strategist, Markets Live. For the full analysis, click here.
Nvidia shares fell in US trading after a filing showed Peter Thiel’s hedge fund sold its stake in the chipmaker during the third quarter.
“While we should expect an eventual reckoning for blindly throwing trillions of dollars at AI capital expenditures with no clear path to profitability, markets are unlikely to tip over while the Fed is still in easing mode and the economy is still strong,” said Dennis Follmer at Montis Financial.
Meanwhile, Fed Vice Chair Philip Jefferson said he sees risks to the labor market as skewed to the downside, but warned policymakers need to proceed slowly. Fed Governor Christopher Waller is backing a cut in December, citing weak jobs.
Interest-rate strategists at Goldman Sachs Group Inc., Barclays Plc and Bank of America Corp. are among those expecting US economic data delayed by the government shutdown will revive the case for a Fed interest-rate cut in December.
Though Treasury yields are little changed from late-September levels, “reductions in near-term cut pricing and lower front-end inflation through the course of the shutdown reflect a hawkish shift in the market’s Fed assessment,” a Goldman team including William Marshall and George Cole wrote in a Nov. 14 report.
Corporate News:
Xpeng Inc.’s fourth-quarter revenue forecasts trailed expectations, raising concerns about its plan to break even next year. Akzo Nobel NV is in advanced talks to combine with rival paintmaker Axalta Coating Systems Ltd., according to people familiar with the matter. Amazon.com Inc. raised $15 billion in its first US dollar bond offering in three years, adding to a spree of jumbo debt sales by technology firms. Gina Rinehart, Australia’s richest person, has become the biggest shareholder in US rare-earths producer MP Materials Corp., boosting her global bet on strategic minerals. Thoma Bravo has made an offer to acquire Clearwater Analytics, Reuters reported, citing unidentified people familiar with the matter. Clearwater Analytics shares jumped 2.9% in postmarket trading Monday after closing nearly 4% higher. Rio Tinto Group will almost halve production at its Yarwun Alumina refinery in Australia as a waste stockpile reaches capacity and the company seeks to cut costs. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 9:03 a.m. Tokyo time Hang Seng futures fell 0.7% Japan’s Topix fell 0.6% Australia’s S&P/ASX 200 fell 0.9% Euro Stoxx 50 futures fell 0.9% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1587 The Japanese yen was little changed at 155.33 per dollar The offshore yuan was unchanged at 7.1083 per dollar Cryptocurrencies
Bitcoin rose 0.3% to $92,101.76 Ether rose 0.7% to $3,025.51 Bonds
The yield on 10-year Treasuries was little changed at 4.14% Japan’s 10-year yield advanced 1.5 basis points to 1.740% Australia’s 10-year yield was little changed at 4.48% Commodities
West Texas Intermediate crude fell 0.2% to $59.79 a barrel Spot gold fell 0.2% to $4,036.30 an ounce This story was produced with the assistance of Bloomberg Automation.
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