(Bloomberg) — European stocks fell as weaker earnings in the luxury goods sector fueled negative sentiment over the semiconductor industry’s profit outlook. Sterling weakened as British inflation slowed, raising expectations for interest rate cuts.
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The Stoxx 600 index fell 0.4% after semiconductor manufacturing equipment giant ASML Holding NV widened its losses after issuing a profit warning on Tuesday. LVMH and Salvatore Ferragamo SpA led the decline in luxury stocks following weak results, with both companies falling as much as 7%. US stock futures were little changed.
The drop in ASML’s stock price rippled through the industry, wiping out more than $420 billion in market capitalization for an index of U.S.-traded semiconductor manufacturers and Asia’s largest stocks. Nvidia fell nearly 5% on Tuesday after hitting a record closing price earlier this week.
“The technology-driven setback caused by the downturn in semiconductor manufacturers not only reflects earlier skepticism about AI-driven upswings, but more broadly, the slowdown in this economically sensitive industry is certainly a sign of global economic growth. does not bode well for the outlook,” Hebbe said. Mr. Chen is an analyst at IG Markets.
The pound fell 0.6% to $1.2990, its lowest since August 20. Data on Wednesday showed consumer prices rose just 1.7% in September from a year earlier, lower than economists expected. The data led investors to bet on more aggressive easing from the Bank of England.
Bloomberg’s dollar index rose after rising to a nearly two-month high after former President Donald Trump defended his proposal to increase tariffs on foreign imports. Atlanta Fed President Rafael Bostic said he expects the U.S. economy to slow but remain strong this year, adding that there could be some bumps in the downward path for inflation. Government bond yields fell slightly.
In Asia, Bloomberg’s China real estate index rose as much as 8.3% as markets prepared for a joint press conference on Thursday with government officials including the housing minister and the central bank.
Chinese stocks have soared since late September, when a flurry of optimism sparked by a series of central bank stimulus measures began to dissipate. Many investors remain optimistic enough to wait to see if authorities are prepared to unleash more firepower to support the economy.
Kenny Wen, head of investment strategy at KGI Asia, said any announcement “may only help real estate stocks for a day or two, but it won’t help the market as a whole.” is only in the real estate sector,” he said, adding that investors are still waiting for an announcement in the next few days. It’s a trillion yuan fiscal policy, he said.
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The yen traded around 149 yen to the dollar after Bank of Japan board member Seiji Adachi emphasized the need to take a phased approach to raising benchmark interest rates.
oil gain
Oil rose as Israel said it would decide independently how to attack Iran, leaving energy infrastructure open to targets. Oil prices have been on a roller coaster this month, with prices fluctuating due to tensions in the Middle East and China’s efforts to revive growth in its biggest importer.
“It seems like dealers these days are just tying machines to oil futures,” said Christoph Rieger, head of rates and credit research at Commerzbank. “Whether it makes sense to adjust the long-term inflation outlook in light of this is another question.”
This week’s main events:
Morgan Stanley earnings results Wednesday
ECB interest rate decision, Thursday
U.S. retail sales, unemployment claims, industrial production, Thursday
Fed’s Austan Goolsby speaks on Thursday
China GDP, Friday
U.S. housing starts Friday
Fed’s Christopher Waller and Neel Kashkari speak on Friday
The main movements in the market are:
stock
As of 8:30 a.m. London time, the Stoxx European 600 was down 0.3%.
S&P500 futures little changed
Nasdaq 100 futures rose 0.1%
Dow Jones Industrial Average futures little changed
MSCI Asia Pacific Index falls 0.8%
MSCI Emerging Markets Index falls 0.5%
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0883.
The Japanese yen remained almost unchanged at 149.18 yen to the dollar.
The offshore yuan rose 0.1% to 7.1273 yuan to the dollar.
The British pound fell 0.6% to $1.2995.
cryptocurrency
Bitcoin rose 0.6% to $66,907.38
Ether rose 1.2% to $2,604.16
bond
The 10-year Treasury yield fell 2 basis points to 4.02%.
Germany’s 10-year bond yield fell 2 basis points to 2.20%.
UK 10-year bond yields fell 6 basis points to 4.10%.
merchandise
Brent crude rose 0.7% to $74.78 per barrel
Spot gold rose 0.5% to $2,675.58 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Kurt Schussler, Yuling Yang, Jake Lloyd-Smith, and Zhu Lin.
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