Stocks stunned by ASML curveball, pound plunges
A look at the day ahead in U.S. and global markets from Mike Dolan
World markets struggled to find a footing on Wednesday after Europe's ASML ASML.AS sideswiped the global chip sector late yesterday with a surprisingly weak orders outlook and investors prayed the flub was a one-off as third-quarter earnings updates stream in.
There was better news for bond markets - with yields declining on a mix of falling oil prices and significant European disinflation that underscores expectations of another European Central Bank interest rate cut on Thursday.
And that picture was replicated in Britain on Wednesday, with headline inflation dropping much further below the Bank of England's 2% target than markets had bet on - upping bets on a BOE rate cut next month and knocking the pound GBP= back to its lowest in almost two months.
With European fixed income markets rallying again, U.S. Treasury yields also fell back close to 4% and Federal Reserve futures are back fully pricing a quarter point U.S. rate cut on Nov. 7.
But much of the heat and price action was in stocks.
While banks and pharma firms dominate Wednesday's diary, reverberations from ASML's big miss knocked Wall Street .SPX back from record highs on Tuesday, adding to a swoon in energy stocks from falling oil prices CLc1 and throwing a spotlight on Thursday's update from Taiwan's chip behemoth TSMC.
The read across to AI-darling Nvidia NVDA.O saw its shares recoil almost 5% from Monday's new record, with a small recovery pencilled in ahead of today's bell.
However ASML itself, the world's biggest chipmaking equipment manufacturer, shed another 4% in Europe on Wednesday, adding to the 16% loss on Tuesday - its steepest one-day decline in four years.
And in a bad week for European stocks more generally, the luxury sector remained under the cosh as France's LVMH LVMH.PA dropped 7% due a fall in third-quarter sales hit by waning customer confidence in China.
China's struggling economy, U.S. investment curbs on its technology sector and a brewing tariff trade war between Beijing and Brussels tie all these stories together.
And despite slightly frantic Chinese stimulus measures in recent weeks to lift the flagging economy, the initial stocks boost from that is fading fast. China's mainland index .CSI300 and Hong Kong's Hang Seng .HSI ended in the red again on Wednesday - both more than 10% off post-stimulus highs.
Beijing will hold a press conference on Thursday to discuss promoting the "steady and healthy" development of the property sector, the State Council Information Office said, although that's failed to reignite much market excitement.
And indeed China's troubles, along with scaled back global oil demand forecasts for 2025, are one of the reasons crude prices are sliding yet.
Crude tumbled more than 4% to a near two-week low on Tuesday due to that weaker outlook and after a media report said Israel would not strike Iranian nuclear and oil sites, easing fears of supply disruptions.
While U.S. oil prices tried to retain a toehold on $70 per barrel on Wednesday, they continue to track year-on-year losses of close to 20% and remain a powerful force depressing headline annual inflation rates.
Back on Wall St, the chip sector wobble cut across better news from the banks.
Bank of America BAC.N shares rose 0.5% following a third-quarter profit beat, while Charles Schwab SCHW.N shares climbed 6% after exceeding estimates.
Citigroup C.N, however, fell 5% after it reported mixed results with net income declining and net interest income weaker than expected while debt underwriting propped up its investment banking results.
Morgan Stanley and some of the small regional banks are up next on Wednesday.
Wall St futures ESc1 more broadly are slightly higher before the open.
Aided in part by sterling's slide, the dollar index .DXY nudged to its best levels since early August.
As the U.S. election campaign enters its final phase, betting markets put Republican Donald Trump as the slight favorite to return to the White House despite opinion polls showed a tight race between him and Democrat rival Kamala Harris.
Trump on Tuesday defended his protectionist trade policies and other fiscal proposals in an interview with Bloomberg, dismissing suggestions that they could drive up the federal debt.
And he appeared to back away from previous comments that as president, he should be able to exert control over the Fed interest rate decisions.
"I think I have the right to say I think you should go up or down a little bit," Trump said, referring to setting interest rates. "I don't think I should be allowed to order it, but I think I have the right to put in comments as to whether or not the interest rates should go up or down."
How Trump plans to weaken the dollar, however, remains a bit of mystery beyond his well-flagged tariff plans.
Key developments that should provide more direction to U.S. markets later on Wednesday:
* US corporate earnings: Morgan Stanley, US Bancorp, Citizens Financial, Discover Financial, Equifax, Synchrony, Prologis, Abbott Laboratories, CSX, PPG, Kinder Morgan, Steel Dynamics, Crown Castle
* US September import/export prices
* European Central Bank President Christine Lagarde speaks
ASML posts biggest one-day fall since 1998 https://reut.rs/4f2cBN4
European luxury and tech stocks struggle for momentum https://reut.rs/3zYybTU
UK inflation falls below the BoE's target in September https://reut.rs/3NsKZot
UK and euro zone inflation below 2% https://reut.rs/3Tq7wFh
New York Fed Estimates of R-Star https://reut.rs/3NrSMCZ
Editing by Bernadette Baum
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
