Tech Stocks Retreat Deepens Ahead of US Payrolls: Markets Wrap
(Bloomberg) — A retreat in technology stocks entered a second day, with chipmakers in South Korea bearing the brunt of the selling. Treasuries and the dollar edged lower ahead of the US payrolls report for June.
Nasdaq 100 futures slid 0.8%, pointing to further losses after semiconductors led Wall Street lower in the previous session. S&P 500 contracts fell 0.2%. Memory makers SK Hynix Inc. and Samsung Electronics Co. drove a 7.9% slump in South Korea’s Kospi index. In Europe, the Stoxx 600 rose 0.1%, with 14 of the 20 index sectors posting gains.
The increasingly frequent swings in the market’s biggest driver come as a near-parabolic rally in chipmakers begins to stutter, with traders reacting on any sign that the rally has run too far. In the latest instance, Meta Platforms Inc.’s plan to sell computing power has raised questions about excess capacity.
“Speculative positioning within the technology sector has been shifting sharply, almost from one day to the next, but fundamentals still support a long-term upward trend,” said Roberto Scholtes at Singular Bank. “Earnings are only three weeks away and will likely be the real determining factor.”
Traders will also focus on the US jobs report at the end of a holiday-shortened week. The data will offer fresh clues on the path for interest rates after comments Wednesday by Federal Reserve Chair Kevin Warsh dampened speculation of a hike this year.
Bloomberg Economics expects payrolls to rise at a robust pace, exceeding even May’s strong gain. Hiring likely was especially strong in leisure and hospitality — boosted by the World Cup — while government employment should post its fastest increase of the year.
Brent fell 0.7% to $71 a barrel as flows through the Strait of Hormuz climbed. The yen strengthened sharply against the dollar amid rising speculation that the currency’s continued weakness may prompt a fresh round of intervention by Japan.
Corporate News:
OpenAI has begun preliminary discussions about giving the US government a 5% stake in the ChatGPT-developer, the Financial Times reported, citing two people familiar with the talks. Apple Inc. is in negotiations to purchase chips from two Chinese semiconductor makers on a Pentagon blacklist to help reduce the impact of a global memory shortage that’s forced the company to raise prices across its product line. UBS Group AG already has enough capital to meet proposed new requirements in the reform pushed by the Swiss government, according to the Swiss National Bank. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 8:32 a.m. London time S&P 500 futures fell 0.2% Nasdaq 100 futures fell 0.8% Futures on the Dow Jones Industrial Average fell 0.1% The MSCI Asia Pacific Index fell 1.6% The MSCI Emerging Markets Index fell 2.3% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1398 The Japanese yen rose 0.5% to 161.71 per dollar The offshore yuan was little changed at 6.7909 per dollar The British pound rose 0.3% to $1.3319 Cryptocurrencies
Bitcoin was little changed at $60,089.75 Ether fell 0.1% to $1,614.87 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.49% Germany’s 10-year yield advanced two basis points to 2.90% Britain’s 10-year yield advanced three basis points to 4.79% Commodities
Brent crude fell 0.7% to $71.10 a barrel Spot gold rose 0.8% to $4,063.75 an ounce This story was produced with the assistance of Bloomberg Automation.
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