Yesterday was a much calmer session after Tuesday’s fireworks. The big fallers at an index level were found in Europe. However, to some extent, those losses were a delayed reaction to events the day before, as a lot of the bad news had been unearthed after the European close on Tuesday. That said, the Swiss SMI fell 1.4%, and the Euro Stoxx 50 fell by 1.3%, as did Sweden's OMX index.
At a stock level, ASML Holdings fell by 5.9%. The Dutch firm is the world's major manufacturer of lithography equipment, which is essential to producing silicon chips. Uncertainty in the semiconductor sector, caused by events at Nvidia and Intel, has taken that niche position from a strength into a weakness over the last week, during which time ASML has fallen by almost 8%.
Consumer discretionary stocks also came under pressure in Wednesday's trade, with LVMH falling 4.2%, Kering slipping by 2.2%, and drinks company Pernod Ricard giving up 2%.
There were gainers among the Euro Stoxx 50 components. Real-estate giant Vonovia once again took top billing, up by 2.5% to take its weekly gains to 3.3%. Yesterday's candle in Vonovia was bullish; not quite an engulfing pattern but close to one, and possibly strong enough to break the price away from near-term resistance. Danone, Sanofi, Deutsche Telekom and Deutsche Boerse were other notable gainers on the day.
In the UK topflight, British Land added 2.1%, up 5 5% over the last week. M&A returned to real-estate and REIT stocks with the emergence of private equity and trade buyers in the sector. For now, the focus is on data centres and warehousing. However, the positive sentiment appears to extend to owners of office space, who are also potentially benefiting from a read across from Vonovia.
Short-term momentum in the US IT and communication services sectors has helped lead the market higher year-to-date. The financial sector is the S&P 500’s second-best performer year to date, up by 20.46% in 2024 as of yesterday’s close.
On the macroeconomic calendar today, US weekly jobless claims are probably the main event, particularly after yesterday’s JOLTS job opening data undershoot forecasts by such a large margin, as well as final S&P purchasing manager index (PMI) readings for the US, alongside the ISM non-manufacturing, or services, data.
There was also some positive news out of Germany this morning, where factory orders rose unexpectedly, growing 2.9% month-on-month. The prior month's data was also revised higher. The improvement came about thanks to large orders for aircraft, ships and trains, which showed a growth rate of 86.5% in July.
European equity markets have opened flat, though the CAC 40 has fallen by 0.2%, perhaps taking its lead from a 1.05% fall in the Nikkei 225 overnight.
Oil prices look to have steadied and are fractionally higher in Europe. Gold is trading up by 0.34% and back above $2,500 per ounce.
Once again there are few, if any, movers of note among major FX pairs. US 10-year bond yields are steady at 3.758%, though that is lower than they were this time yesterday.
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