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Tech Stocks Drag Down US Futures, Eyes on Weak Yen: Markets Wrap

(Bloomberg) — Technology stocks led declines in U.S. stock futures Thursday after Meta Platforms Inc.’s disappointing outlook underscored the risk of volatility during a week of high-stakes earnings.

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Nasdaq 100 contracts fell 1.2%, with Meta accounting for about half of that decline. Facebook’s parent company fell 19% after hours in the United States as it forecast second-quarter sales below analysts’ expectations and an increase in estimated spending for the year. Alphabet Inc., which will report results later along with Microsoft Corp., also fell. S&P 500 futures slipped 0.6%.

Europe’s Stoxx 600 index fell as traders processed a deluge of company updates on the busiest day of earnings season. Anglo American Plc soared 13% after rival mining giant BHP Group made a share buyback proposal, valuing it at £31.1 billion ($38.8 billion).

Besides the results, traders are eagerly awaiting U.S. economic growth figures due later, after weeks of lowering their expectations for an interest rate cut from the Federal Reserve. Economists surveyed by Bloomberg forecast that GDP is expected to have cooled to around 2.5% in the first quarter, with the numbers still potentially suggesting lingering inflationary pressures.

“Any downside surprises could lead markets to announce expected Fed interest rate cuts earlier, after being pushed back much later this year,” said economists at Rand Merchant Bank in Johannesburg. “However, upside surprises could lead to continued market volatility as the market attempts to determine the risk that a hotter-than-expected economy poses to anticipated interest rate cuts.”

The yen extended its losses after weakening beyond 155 per dollar for the first time in more than three decades on Wednesday, increasing the chances of intervention ahead of the Bank of Japan’s policy decision on Friday.

The yen depreciated to 155.74 per dollar on Thursday, a new 34-year low against the dollar. The BOJ is expected to keep interest rates unchanged on Friday, while the falling currency makes it more likely that the bank will soften its stance towards accommodative policy.

“Ueda’s press conference is expected to take a hawkish tone, and even if the yen’s depreciation does not accelerate, the government is likely to intervene at the same time and push the yen up by around 5 yen,” said Eiji Dohke. strategist at SBI Securities. The first intervention would likely be billions of yen, followed by small, long-term purchases, he said.

Treasuries were little changed after yields rose in the previous session. Investors absorbed a $70 billion sale of five-year Treasuries on Wednesday at a slightly higher-than-expected yield, following even stronger demand for Tuesday’s two-year Treasury bond auction.

In Asia, the region’s stock index fell more than 1% as shares in South Korea and Japan fell. Stocks outperformed in Hong Kong amid increased buying by Chinese investors. Mainland traders have acquired $20 billion of Hong Kong stocks on a net basis since March, putting the market on track for the biggest two-month inflow since 2021, BNP strategists said. including Jason Lui, in a note.

Meanwhile, Secretary of State Antony Blinken said the world’s biggest economies must “expose their differences” as he began two days of negotiations in China, with the threat of US sanctions targeting Beijing over his support for the Russian war in Ukraine. .

Company strengths:

Barclays Plc reported first-quarter revenue that beat analysts’ estimates after its stock traders reaped a surprise windfall from tumultuous global markets.

Deutsche Bank AG has relied on its traders and investment bankers to offset slowing loan revenue as CEO Christian Sewing seeks to hit an ambitious revenue target.

BNP Paribas SA’s bond traders lagged all major Wall Street banks in the first quarter, dampening the strong performance of other segments of the investment bank.

Unilever Plc’s sales jumped more than expected in the first quarter as CEO Hein Schumacher continues his turnaround plan.

Nestlé SA’s sales growth slowed in the first quarter as coffee maker Nespresso was hit by weaker demand in North America and supply constraints at its vitamins unit.

STMicroelectronics NV reported weaker sales than analysts expected, exacerbated by a slowdown in demand for chips from the automotive sector.

AstraZeneca Plc’s profit rose in the first quarter, supported by demand for its cancer blockbusters Imfinzi and Tagrisso as well as newcomer Enhertu.

Hermes has seen Chinese shoppers snap up its luxury products as bag maker Kelly showed its resilience amid a broader slowdown in demand in the sector.

Pernod Ricard SA said its quarterly revenue was stable due to continued weak demand in the US and Chinese markets for its expensive alcoholic drinks.

Key events this week:

  • US GDP, wholesale stocks, initial jobless claims, Thursday

  • Results from Microsoft, Alphabet, Airbus, Thursday

  • Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday

  • US personal income and spending, PCE deflator, University of Michigan consumer sentiment, Friday

  • Exxon Mobil, Chevron results, Friday

Some of the main market movements:

Actions

  • The Stoxx Europe 600 fell 0.3% at 8:44 a.m. London time

  • S&P 500 futures fell 0.7%

  • Nasdaq 100 futures fell 1.2%

  • Dow Jones Industrial Average futures fell 0.3%

  • The MSCI Asia-Pacific index fell 1.1%

  • The MSCI Emerging Markets Index fell 0.6%

Currencies

  • Bloomberg Dollar Spot Index little changed

  • The euro rose 0.2% to $1.0717

  • The Japanese yen fell 0.2% to 155.60 per dollar

  • The offshore yuan was little changed at 7.2666 per dollar.

  • The British pound rose 0.3% to $1.2498

Cryptocurrencies

  • Bitcoin fell 0.2% to $63,945.27

  • Ether rose 0.2% to $3,135.49

Obligations

  • The yield on 10-year Treasury bills changed little at 4.64%

  • The German 10-year yield fell two basis points to 2.57%

  • The UK 10-year yield fell two basis points to 4.32%

Raw materials

  • Brent crude rose 0.2% to $88.19 a barrel

  • Spot gold rose 0.3% to $2,322.92 an ounce

This story was produced with the help of Bloomberg Automation.

–With help from Masaki Kondo, Tania Chen, Winnie Hsu and Jan-Patrick Barnert.

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News Source : finance.yahoo.com
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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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