A look at the day ahead in US and global markets from Mike Dolan
Volatility This week looks set to be a turbulent one for global markets. Policy The meeting was held on Friday with Global Technology Blackout That has exacerbated a slide in large-cap stocks, which were already hurt by concerns about new restrictions by chipmakers and disappointing earnings guidance.
Major U.S. airlines ordered flights grounded Friday due to communications problems, while other airlines, media companies, banks and telecoms companies around the world reported system outages disrupting their operations.
The Australian government said the issue there appeared to be linked to a problem at global cybersecurity firm Crowdstrike. (CRWD.O)Opens a new tabwhere its stock fell more than 10% outside business hours.
The gap has added to the tension in the tech sector, as the first batch of earnings updates this reporting season failed to clear the market’s increasingly high barrier.
flow Netflix giant(NFLX.O)Opens a new tab The company reported growth late Thursday as it added more than 8 million subscribers — beating an expected 5 million. But its shares fell overnight on the cautious guidance and after it said its advertising business won’t be the main driver of revenue growth until at least 2026.
There was a similar reaction from Taiwan’s chip industry. TSMC Index(2330.TW)Opens a new tabShares of the Taipei-listed company closed down 3.5% on Friday despite strong earnings and guidance — weighed down by China-U.S. trade concerns and a slump in the U.S. market.
Wall Street futures remained in the red ahead of Friday’s open, with the VIX volatility index down. (.VIX)Opens a new tab The Nasdaq fell on Thursday, hitting its highest level since April. (.IXIC)Opens a new tab This means that this was the worst two-day performance for the index since last October, and even small-cap companies (.rut)Opens a new tabBig tech stocks, which benefited from the rotation away from big tech companies earlier in the week, fell more than 1%.
Despite the wobbles of big tech companies, the backdrop of a more uncertain US election race has been unnerving.
While his Republican rival Donald Trump – Now the odds-on favorite in the betting markets to return to the White House – took to the stage all night at his home Party conferencepress President Joe Biden Calls for his resignation have reached a fever pitch, with press reports suggesting he could announce his withdrawal over the weekend.
Hedging bets on who might replace Biden have led bookmakers to cut Trump’s chances of winning to about 60% from more than 70% on Monday after the former president’s assassination attempt last weekend.
Interest rates markets were also more nervous, with 10-year US Treasury yields rising despite news of a sharp rise in weekly yields. Unemployment claims Thursday.
While futures are still baking in the shadow of the Fed’s first rate cut in September, the dollar (.DXY)Opens a new tab It rose from its lowest levels during the week.
Euro falls after expected ECB decision on Thursday European Central Bank The US central bank decided to keep interest rates unchanged – with markets now expecting a second cut this year in September but having doubts about the path beyond that.
The pound fell to $1.29 after a weak reading of UK retail sales for June.
The Japanese yen and the Chinese yuan also fell, with the former weakening on subdued expectations. Japanese inflation Readings raise some doubts about the Bank of Japan’s tightening of monetary policy.
Japanese government Japan’s central bank also cut its growth forecast for this year on Friday as consumption is hurt by higher import costs due to a weaker yen.
The Mexican peso has suffered sharp losses since the previous session.
Mainland China Stocks (.CSI300)Opens a new tab However, Hong Kong stocks held steady again, ending the week higher with a seven-session winning streak after the government’s four-day leadership meeting ended on Thursday. (.HSI)Opens a new tabHowever, US stocks were closer to the global mood and lost 2% on Friday.
Due to its lack of detail, Chinese officials Chinese President Xi Jinping acknowledged on Friday that a sweeping list of economic targets reaffirmed at the end of a key Communist Party meeting contains “many complex contradictions,” pointing to a bumpy road ahead for policy.
More specific measures are likely to emerge next week.
Back on Wall Street, we have a troubling weekend ahead with a mixed trading day due to various technical issues with global outages and a thin record of events and a close watch on weekend politics.
Key developments that could provide further guidance for U.S. markets later Friday:
* US corporate earnings: American Express, Fifth Third, Regis Financial, Huntington Bankshares, Travelers, Halliburton, Schlumberger
* Canada producer prices in June, retail sales in May * New York Fed President John Williams and Atlanta Fed President Raphael Boucek speak
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