Morning Note: A Round-up of Global Financial Market News.
Market News
Global stocks slumped to a two-week low as the tech sector came under renewed pressure. In the US, Apple fell 6% after it announced price hikes for iPads and Macs, citing an unprecedented memory chip shortage driven by AI data center demand, while its suppliers fell this morning in Asia. OpenAI said it may delay its IPO until 2027.
In Asia, stocks were also weak: Nikkei 225 (-4.2%); Hang Seng (-1.9%); Shanghai Composite (-2.0%); Kospi (-7.8%). Tokyo’s key inflation gauge picked up for the first time in eight months, rising 1.6% in June and keeping the Bank of Japan on a trajectory to hike rates further.
The FTSE 100 is currently 0.4% lower at 10,489. Sterling trades at $1.3210 and €1.1595, while the 10-year Gilt yields 4.69%. Retailers have suffered the biggest fall in sales for more than 40 years as the crisis gripping Britain’s high streets intensifies; the CBI said 64% of firms reported that sales in the past three months were lower than in the same period last year.
Brent has fallen back below $74 a barrel, reversing yesterday’s gains as investors assessed rising shipping activity through the Strait of Hormuz despite a vessel being struck by an unidentified projectile off the coast of Oman. The incident revived security concerns and heightened fears that Iran could exert greater control over traffic in the key waterway, while several commercial ships turned back, threatening the progress achieved through US-Iran peace efforts.
Gold rose back above $4,000 an ounce after the latest US PCE inflation data came in broadly in line with expectations, easing fears of imminent Fed rate hikes and pushing the dollar and Treasury yields lower. Even so, markets are pricing in an 80% chance of a rate hike in December following last week’s hawkish pause, while the probability of a September increase stands at around 63%.
Chinese carmakers surpassed 10% of total European sales for the first time in May, led by hybrid and plug-in hybrid models. EU member states agreed to extend the suspension of tariffs on $4bn of American products related to the Boeing-Airbus trade dispute.
Source: Bloomberg
