The war-sparked risk-off sentiment continued to weigh on global stock markets, with Wall Street sinking for the second straight trading day. Nasdaq slumped into correction territory, down 10% from the year-high in July as technology stocks slumped amid mixed earnings results. All the mega-cap tech stocks fell between 1% and 4%. Meta Platforms slid 3.7% as the company warned of softening advertising demands and increased spending on its Reality Labs. Amazon’s stocks jumped before cutting gains in after-hours trading amid mixed earnings results.
On the economic front, the US advanced third-quarter GDP was surprisingly strong, up 4.9% year on year, a jump from 2.1% in the second quarter. The data may keep the Fed on its hawkish policy stance for longer. However, markets are still pricing no more rate hikes amid the Hamas-Israel war as government bond yields slid and the US dollar’s upside momentum eased.
Gold futures were flat but stayed at the recent high of US$1,995 per ounce, while crude oil fell as Israel may pause the plan for a ground invasion of the Gaza Strip. However, natural gas prices climbed for the fourth straight trading day on fears of a further development of geopolitical tensions in the Middle East.
Asian markets are set to open mixed. ASX 200 futures were down 0.23%, Hang Seng Index futures were up 0.46%, and Nikkei 225 futures fell 0.23%.
Price movers:
- 8 out of 11 sectors in the S&P 500 finished lower, with Communication Services and Technologies, leading losses, down 2.58% and 2.17%, respectively. Real Estate outperformed due to a slump in bond yields, up 2.15%. Utilities and Materials were also higher, up 2.15% and 0.72%, respectively.
- Amazon’s shares rose 3% after-hours trading following mixed earnings results. The e-commerce giant’s revenue came to US$143.1 billion, up 13% year on year, the fastest since the third quarter of 2022. The AWS revenue was 23.1 billion, up 12% yearly, but slightly lower than an expected $23.2 billion.
- Intel’s shares jumped more than 7% following better-than-expected third-quarter earnings. The chipmaker beat expectations for both profit and revenue, thanks to cost-cutting measures. However, its revenue posted a seven-consecutive decline to US$14.16 billion.
- USD/JPY rose to a fresh high since October 2022, reaching 150.80 at a point as the BOJ intervened in the surging government bond yield. The bank is set to hold a policy meeting next week when it is expected to keep the ultra-loss monetary policy.
- The Eurodollar bounced off a session low against the US dollar after the ECB paused its rate hike campaign at the back of rising economic risks due to the war and cooling inflation.
Today’s agenda:
- Tokyo Core CPI
- RBNZ Statement of Intent
