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Big Tech Weighs On Stocks With S&P Off Day’s High: Markets Wrap

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Big Tech Weighs On Stocks With S&P Off Day’s High: Markets Wrap

Stocks traded well off session highs, with Apple Inc. quickly erasing gains and Netflix Inc. slumping ahead of its earnings report.

The S&P 500 trimmed most of a rally that topped 2% earlier in the day, while the tech-heavy Nasdaq 100 underperformed. Apple shares turned negative after the Information reported the tech giant is cutting production of its iPhone 14 Plus, citing people familiar with the matter. Goldman Sachs Group Inc. climbed on solid results.

Upbeat company results, cheaper valuations and UK policy reversals have buoyed risk assets this week. Still, with headwinds from inflation, risks to the economy and hawkish central banks continuing to confront investors, there’s debate over how durable the gains will prove.

“The economic landscape looks treacherous and we don’t even know if we’re at peak inflation and interest rate pricing yet. Those are substantial headwinds that will make any stock market rebound extremely challenging,” said Craig Erlam, senior market analyst at Oanda Europe Ltd.

Read: Earnings Outlooks Are Key to Determining If Stocks Hit Bottom

Some regional Fed directors last month favored raising a key interest rate by a smaller or larger amount than the 75 basis points that policymakers ultimately decided was needed to curb persistent inflation, according to minutes of discount-rate meetings released Tuesday.

Data Tuesday showed a measure of US homebuilder sentiment dropped for a 10th straight month in October, illustrating a housing market battered by soaring mortgage rates. Meantime, factory production rose for a third month in September, suggesting firm growth in manufacturing that’s underpinned by solid business investment and demand for consumer goods.

The sentiment on stocks and global growth among fund managers surveyed by Bank of America Corp. shows full capitulation, opening the way for equities to bottom in the first half of 2023.

Key events this week:

  • Euro area CPI, Wednesday
  • EIA crude oil inventory report, Wednesday
  • US MBA mortgage applications, building permits, housing starts, Fed Beige Book, Wednesday
  • Fed’s Neel Kashkari, Charles Evans, James Bullard speak, Wednesday
  • US existing home sales, initial jobless claims, Conference Board leading index, Thursday
  • Euro area consumer confidence, Friday
WATCH: Liz Young at SoFi cautions investors about equity market rally.Source: Bloomberg
WATCH: Liz Young at SoFi cautions investors about equity market rally.Source: Bloomberg

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 0.6% as of 3:02 p.m. New York time
  • The Nasdaq 100 was little changed
  • The Dow Jones Industrial Average rose 0.7%
  • The MSCI World index rose 0.7%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $0.9849
  • The British pound fell 0.4% to $1.1316
  • The Japanese yen fell 0.1% to 149.20 per dollar

Cryptocurrencies

  • Bitcoin fell 1.9% to $19,165.94
  • Ether fell 3.1% to $1,289.26

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.99%
  • Germany’s 10-year yield advanced two basis points to 2.28%
  • Britain’s 10-year yield declined three basis points to 3.95%

Commodities

  • West Texas Intermediate crude fell 3.3% to $82.68 a barrel
  • Gold futures fell 0.6% to $1,654.60 an ounce

More stories like this are available on bloomberg.com

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