US stock-index futures fell, indicating a continued selloff on Wall Street after a slump on Tuesday. This comes as a result of poor manufacturing PMI and ISM data, leading to renewed concern that a recession may be looming. Futures on the S&P 500 dropped 0.4% while contracts on the Nasdaq 100 Index declined 0.8% at 8.00 am ET. This comes as NVDA extended its record losses, which saw a historic $280 billion in market cap wiped out in Tuesday's session, after a Bloomberg report hit just after the close that Kamala's DOJ sent subpoenas to the chipmaker.
In premarket trading, Nvidia slid 1.9% after Bloomberg reported that the US DOJ sent subpoenas to the chipmaker, as well as other companies, as it sought evidence that the dominant provider of AI processors violated antitrust laws. Zscaler plunged 16% after the security-software company gave a full-year forecast that is weaker than expected on both adjusted earnings and revenue.
The S&P 500 on Tuesday fell the most since Aug. 5, when recession fears triggered a brief meltdown, while the Nasdaq 100 had its biggest decline since July 24 as Nvidia crashed. The declines came after the ISM's manufacturing gauge showed that activity shrank for a fifth straight month, while commentary in the S&P PMI manufacturing report was downright apocalyptic.
The sudden souring of risk sentiment comes just as US equities were edging back toward the all-time high set in mid-July. Other key data to watch this week include July job openings on Wednesday, services PMI and jobless claims on Thursday and non-farm payrolls on Friday. These readouts may shed further light on how much and how quickly the Federal Reserve will lower interest rates, after Chair Jerome Powell last month telegraphed a September cut.
The US job openings report due on Wednesday is expected to show further cooling in the labor market, following yesterday’s data showing a fifth consecutive month of contraction in manufacturing activity. As the market’s focus shifts from inflation to concerns over economic growth, negative macro data is increasingly translating into pain for stocks and other risk assets.
For now, traders are anticipating the Federal Reserve will start easing policy in September and reduce rates by more than two full percentage points over the next 12 months — the steepest drop outside of a downturn since the 1980s. Payrolls data due on Friday is considered crucial in shaping the magnitude of the initial rate cut.
European stocks followed their Asian counterparts lower after Wall Street’s worst day since the August meltdown. The Stoxx 600 falls 1%, led lower by technology shares. European luxury stocks fell, with LVMH and Richemont notable underperformers as Morgan Stanley cut its price targets on the two stocks amid worries over weakening demand from Chinese customers. Adding to the gloom, Swiss luxury watchmakers are turning to the government for financial aid to help them weather a downturn in demand.
Earlier in the session, Asian equities suffered broad-based losses following Tuesday’s tech-led US selloff. Taiwan's Taiex index plunged as much as 5.3% with TSMC tumbling amid Nvidia’s record wipeout. Japan’s Nikkei slumps more than 3.5% as the yen soared, while Korea's Kospi sheds almost 3%. Chinese indexes are relative outperformers, with the CSI 300 down less than 0.5%. Hang Seng drops about 1.1%.
In FX, the yen is the strongest of the G-10 currencies, rising 0.2%. The Bloomberg Dollar Spot Index falls 0.1%.
In rates, treasuries are richer across the curve with gains led by front-end and belly, steepening 2s10s and 5s30s spreads to unwind most of Tuesday’s flattening moves. Front-end US yields are richer by about 3bp, long-end yields by less than 2bp, leaving 2s10s, 5s30s spreads slightly steeper. 10-year around 3.81% is ~2bp richer on the day, trailing bunds in the sector by ~3bp, gilts by 1.5bp. Wider gains across core European rates follow a sharp selloff in Asia equities as risk-aversion takes hold globally. The US session includes several pieces of economic data led by JOLTS job openings, with Fed policymakers attuned to signs of weakness in labor market to guide policy.
In commodities, oil rose slightly after crashing to a nine-month low as Reuters reversed its Friday story, and now "reports" that OPEC+ may not boost output after all (just as we said). Brent futures, the international benchmark, advanced above $74 a barrel following a near 5% meltdown on Tuesday. West Texas Intermediate rose 0.8%, after dropping under $70 for the first time since early January. Spot gold drops $14 to around $2,479/oz. Iron ore and copper are also in the red.
Looking at today's calendar, we get the July trade balance (8:30am), July JOLTS job openings and factory orders (10am) and Fed Beige Book (2pm). No Fed speakers are scheduled; Williams and Waller are slated to speak Friday.
Market Snapshot
S&P 500 futures down 0.4% to 5,521
STOXX Europe 600 down 0.9% to 515.19
MXAP down 2.5% to 181.21
MXAPJ down 1.9% to 561.58
Nikkei down 4.2% to 37,047.61
Topix down 3.7% to 2,633.49
Hang Seng Index down 1.1% to 17,457.34
Shanghai Composite down 0.7% to 2,784.28
Sensex down 0.3% to 82,284.17
Australia S&P/ASX 200 down 1.9% to 7,950.48
Kospi down 3.1% to 2,580.80
German 10Y yield down 3.4 bps at 2.24%
Euro up 0.1% to $1.1056
Brent Futures down 0.4% to $73.49/bbl
Gold spot down 0.6% to $2,479.05
US Dollar Index down 0.18% to 101.65
Top Overnight News
Nvidia looks set to extend yesterday’s $279 billion loss of value — the biggest ever for a US stock. The DOJ sent subpoenas to Nvidia and other tech firms as part of an escalating antitrust probe. BBG
OPEC+ is discussing a possible delay to an oil output increase planned for October, delegates said, after prices crashed to the lowest since last year. WTI crude rose after earlier sliding below $70. Reuters
China is considering cutting interest rates on as much as $5.3 trillion of mortgages in two steps to lower borrowing costs for millions of families while mitigating the profit squeeze on its banking system. Financial regulators have proposed reducing rates on outstanding mortgages nationwide by a total of about 80 basis points, part of a package that includes an accelerated timeline for when mortgages become eligible for refinancing. BBG
Investment banks are cutting their growth forecasts for China, believing Beijing
US stock-index futures fell, indicating a continued selloff on Wall Street after a slump on Tuesday. This comes as a result of poor manufacturing PMI and ISM data, leading to renewed concern that a recession may be looming. Futures on the S&P 500 dropped 0.4% while contracts on the Nasdaq 100 Index declined 0.8% at 8.00 am ET. This comes as NVDA extended its record losses, which saw a historic $280 billion in market cap wiped out in Tuesday's session, after a Bloomberg report hit just after the close that Kamala's DOJ sent subpoenas to the chipmaker.
In premarket trading, Nvidia slid 1.9% after Bloomberg reported that the US DOJ sent subpoenas to the chipmaker, as well as other companies, as it sought evidence that the dominant provider of AI processors violated antitrust laws. Zscaler plunged 16% after the security-software company gave a full-year forecast that is weaker than expected on both adjusted earnings and revenue.
The S&P 500 on Tuesday fell the most since Aug. 5, when recession fears triggered a brief meltdown, while the Nasdaq 100 had its biggest decline since July 24 as Nvidia crashed. The declines came after the ISM's manufacturing gauge showed that activity shrank for a fifth straight month, while commentary in the S&P PMI manufacturing report was downright apocalyptic.
The sudden souring of risk sentiment comes just as US equities were edging back toward the all-time high set in mid-July. Other key data to watch this week include July job openings on Wednesday, services PMI and jobless claims on Thursday and non-farm payrolls on Friday. These readouts may shed further light on how much and how quickly the Federal Reserve will lower interest rates, after Chair Jerome Powell last month telegraphed a September cut.
The US job openings report due on Wednesday is expected to show further cooling in the labor market, following yesterday’s data showing a fifth consecutive month of contraction in manufacturing activity. As the market’s focus shifts from inflation to concerns over economic growth, negative macro data is increasingly translating into pain for stocks and other risk assets.
For now, traders are anticipating the Federal Reserve will start easing policy in September and reduce rates by more than two full percentage points over the next 12 months — the steepest drop outside of a downturn since the 1980s. Payrolls data due on Friday is considered crucial in shaping the magnitude of the initial rate cut.
European stocks followed their Asian counterparts lower after Wall Street’s worst day since the August meltdown. The Stoxx 600 falls 1%, led lower by technology shares. European luxury stocks fell, with LVMH and Richemont notable underperformers as Morgan Stanley cut its price targets on the two stocks amid worries over weakening demand from Chinese customers. Adding to the gloom, Swiss luxury watchmakers are turning to the government for financial aid to help them weather a downturn in demand.
Earlier in the session, Asian equities suffered broad-based losses following Tuesday’s tech-led US selloff. Taiwan's Taiex index plunged as much as 5.3% with TSMC tumbling amid Nvidia’s record wipeout. Japan’s Nikkei slumps more than 3.5% as the yen soared, while Korea's Kospi sheds almost 3%. Chinese indexes are relative outperformers, with the CSI 300 down less than 0.5%. Hang Seng drops about 1.1%.
In FX, the yen is the strongest of the G-10 currencies, rising 0.2%. The Bloomberg Dollar Spot Index falls 0.1%.
In rates, treasuries are richer across the curve with gains led by front-end and belly, steepening 2s10s and 5s30s spreads to unwind most of Tuesday’s flattening moves. Front-end US yields are richer by about 3bp, long-end yields by less than 2bp, leaving 2s10s, 5s30s spreads slightly steeper. 10-year around 3.81% is ~2bp richer on the day, trailing bunds in the sector by ~3bp, gilts by 1.5bp. Wider gains across core European rates follow a sharp selloff in Asia equities as risk-aversion takes hold globally. The US session includes several pieces of economic data led by JOLTS job openings, with Fed policymakers attuned to signs of weakness in labor market to guide policy.
In commodities, oil rose slightly after crashing to a nine-month low as Reuters reversed its Friday story, and now "reports" that OPEC+ may not boost output after all (just as we said). Brent futures, the international benchmark, advanced above $74 a barrel following a near 5% meltdown on Tuesday. West Texas Intermediate rose 0.8%, after dropping under $70 for the first time since early January. Spot gold drops $14 to around $2,479/oz. Iron ore and copper are also in the red.
Looking at today's calendar, we get the July trade balance (8:30am), July JOLTS job openings and factory orders (10am) and Fed Beige Book (2pm). No Fed speakers are scheduled; Williams and Waller are slated to speak Friday.
Market Snapshot
S&P 500 futures down 0.4% to 5,521
STOXX Europe 600 down 0.9% to 515.19
MXAP down 2.5% to 181.21
MXAPJ down 1.9% to 561.58
Nikkei down 4.2% to 37,047.61
Topix down 3.7% to 2,633.49
Hang Seng Index down 1.1% to 17,457.34
Shanghai Composite down 0.7% to 2,784.28
Sensex down 0.3% to 82,284.17
Australia S&P/ASX 200 down 1.9% to 7,950.48
Kospi down 3.1% to 2,580.80
German 10Y yield down 3.4 bps at 2.24%
Euro up 0.1% to $1.1056
Brent Futures down 0.4% to $73.49/bbl
Gold spot down 0.6% to $2,479.05
US Dollar Index down 0.18% to 101.65
Top Overnight News
Nvidia looks set to extend yesterday’s $279 billion loss of value — the biggest ever for a US stock. The DOJ sent subpoenas to Nvidia and other tech firms as part of an escalating antitrust probe. BBG
OPEC+ is discussing a possible delay to an oil output increase planned for October, delegates said, after prices crashed to the lowest since last year. WTI crude rose after earlier sliding below $70. Reuters
China is considering cutting interest rates on as much as $5.3 trillion of mortgages in two steps to lower borrowing costs for millions of families while mitigating the profit squeeze on its banking system. Financial regulators have proposed reducing rates on outstanding mortgages nationwide by a total of about 80 basis points, part of a package that includes an accelerated timeline for when mortgages become eligible for refinancing. BBG
Investment banks are cutting their growth forecasts for China, believing Beijing
