Volatility resurfaces, tech outage rankles
A look at the day ahead in U.S. and global markets from Mike Dolan
Volatility is resurfacing as a turbulent week for world markets and politics was met on Friday with a global tech outage that's compounded a recoil in mega-cap shares, already hit by fears of new chipmaker curbs and underwhelming earnings guidance.
Major U.S. airlines ordered ground stops on Friday citing communications issues, while other carriers, media companies, banks and telecoms firms around the world also reported that system outages were disrupting their operations.
The Australian government said the problem there appears to be linked to an issue at global cybersecurity firm Crowdstrike CRWD.O, whose stock fell more than 10% out of hours.
The hiatus added to tech sector nerves, where the first sweep of earnings updates in the current reporting season failed to jump the increasingly high market bar.
Streaming giant Netflix NFLX.O registered a beat late Thursday as it added more than 8 million subscribers - exceeding the 5 million expected. But its stock fell overnight on cautious guidance and after said its advertising business would not become a primary driver of revenue growth until at least 2026.
There was a similar reaction for Taiwan's chipmaking bellwether TSMC 2330.TW, whose Taipei-listed shares ended 3.5% lower on Friday despite its strong earnings and guidance - dragged down by Sino-U.S. trade concerns and the U.S. market swoon.
Wall Street futures stayed in the red ahead of Friday's open, with the VIX volatility gauge .VIX hitting its highest level since April. Thursday's drop in the Nasdaq .IXIC meant it was the worst two-day performance for the index since last October and even the small cap .RUT, which had benefited in the early week rotation away from Big Tech, fell back more than 1%.
Big tech wobbles aside, the backdrop of the increasingly uncertain U.S. election race jangled nerves.
While Republican challenger Donald Trump - now clear favorite in betting markets for a return to the White House - took the stage overnight at his party's convention, pressure on President Joe Biden to step aside reached a crescendo and press reports suggest he may announce a withdrawal over the weekend.
Perhaps hedging bets on who may replace Biden, bookmakers reduced the chances of a Trump win to about 60% from more than 70% on Monday after last weekend's assassination attempt on the former President.
Interest rate markets were edgier too, with 10-year U.S. Treasury yields pushing higher despite news of a sharp jump in weekly jobless claims on Thursday.
While futures are still baking in the first Federal Reserve interest rate cut for September, the dollar .DXY bounced back from its week's lows.
The euro EUR= retreated following Thursday's expected decision from the European Central Bank to leave its policy rates unchanged - with markets now expecting a second cut of the year in September but having doubts about the trajectory after that.
Sterling GBP= fell back to $1.29 after a poor UK retail sales reading for June.
Japan's yen JPY= and China's yuan CNH= both slipped too, with the former knocked back by sub-forecast Japanese inflation readings that cast some doubt on Bank of Japan tightening.
Japan's government also cut this year's growth forecast on Friday as consumption took a hit from rising import costs due to a weak yen.
Mexico's peso MXN= nursed sharp losses from the prior session.
China's mainland stocks .CSI300 held the line again, however, and ended the week higher with a seven-session winning streak after the four-day government leadership gathering concluded on Thursday. Hong Kong shares .HSI, however, were closer to the global mood and lost 2% on Friday.
Due to its lack of detail, Chinese officials acknowledged on Friday that the sweeping list of economic goals re-emphasised at the end of the key Communist Party meeting contained "many complex contradictions", pointing to a bumpy road ahead for policy.
More concrete measures may emerge next week.
Back on Wall Street, an anxious end to the week beckons with the patchy trading day due to various tech problems with the global outage and with a thin diary of events and a close eye on the weekend's politics.
Key developments that should provide more direction to U.S. markets later on Friday:
* US corporate earnings: American Express, Fifth Third, Regions Financial, Huntington Bancshares, Travelers, Halliburton, Schlumberger
* Canada June producer prices, May retail sales * New York Federal Reserve President John Williams and Atlanta Fed President Raphael Bostic speaks
Wall Street's head spins https://reut.rs/3LvPX2Y
US jobless claims are rising https://reut.rs/3WcnnZ9
A majority of US voters think Biden should end campaign https://reut.rs/3Y565jv
Japan's inflation and interest rates https://reut.rs/3yeJnL3
Netflix sees strong revenue growth as global subscribers reach nearly 278 mln https://reut.rs/3SdlqKU
Aset Berkaitan
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
