Stocks tumbled with US equity futures on the back of disappointing results from the tech giant and a temporary correction in equities. Treasuries retreated with benchmark yields above 4%.
Contracts on the tech-heavy Nasdaq 100 were down about 1% after hours on Amazon.com Inc., as its sales were forecasted. The S&P 500 futures and Stoxx Europe 600 cut losses to trade down 5%.
In an interview with Bloomberg TV, Banque Size CIO Charles-Henri Monchau said, “We are starting to see some companies bleeding out in terms of forecasts and unfortunately we are starting to see large caps disappointing in the market. ” “Earnings is still a headwind for us.”
Despite the downturn, the S&P 500 is heading for a second week of gains for the first time since August.
The 10-year benchmark Treasury yield jumped over 4% as a rally in government bonds began to fizzle out. Government bonds were upbeat this week on hopes that policymakers prepare for aggressive rate cuts amid soft economic data.
The ECB made a second straight 75 basis-point hike on Thursday, but dropped the former reference to a continuing rate hike for “multiple meetings”, a result that was considered dovish.
The Bank of Japan held its negative rate, 10-year yield cap and asset purchases at the end of a two-day policy meeting on Friday, in line with the outlook of 49 economists surveyed by Bloomberg.
Economists still expect the Federal Reserve to hike three-quarters of a percent for the fourth time in a row next week — and the tougher policy is starting to dent corporate earnings.
After the tech giant forecast sluggish sales for the holiday quarter, Amazon shares fell nearly 20% in extended trading before losses. Apple Inc. was stable in after-market trading for its latest quarter on expectations of weaker iPhone and services sales.
Chinese assets also remained in focus, with foreign investors dumping record amounts of mainland China stocks this week and sending Hong Kong shares to a 13-year low. President Xi Jinping’s firm grip on power has not had as much impact domestically, with mainland investors looking for a bargain in Hong Kong.
Oil eased its weekly gains as investors turned away from riskier assets on a weak outlook for China and the broader global economy. West Texas Intermediate was trading near $88 a barrel.
Major events of this week:
- US personal income, personal spending, pending home sales, University of Michigan consumer sentiment, Friday
Some of the main moves in the markets:
shares
- Futures on the S&P 500 fell 0.5% as of 7:46 a.m. New York time
- Futures on the Nasdaq 100 fell 0.9%
- Futures on the Dow Jones Industrial Average were slightly changed
- Stoxx Europe 600 fell 0.5%
- MSCI World Index dropped 0.4%
currencies
- Bloomberg Dollar Spot Index up 0.2%
- Euro $0.9965 . but little has changed
- British Pound $1.1558 . but little has changed
- The Japanese yen fell 0.7% to 147.32 per dollar
cryptocurrency
- Bitcoin falls 1% to $20,190.15
- Ether down 1.7% to $1,501.65
bond
- Yield on 10-year Treasury rose eight basis points to 4.00%
- Germany’s 10-year yield rose 15 basis points to 2.12%
- UK 10-year yield rises five basis points to 3.45%
Goods
- West Texas Intermediate crude fell 0.8% to $88.39 a barrel
- Gold futures fell 0.5% to $1,656.50 an ounce
This story has been published without modification in text from a wire agency feed.
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