Stocks fall amid growth worries stoked by Apple: markets wrap

Gold was at $1 710.13 an ounce.
Image: Bloomberg

Stocks dipped Tuesday after Apple Inc.’s plans to slow hiring highlighted concerns that aggressive monetary tightening to tackle inflation portends an economic downturn.

An Asian equity gauge was dragged down by a drop in technology stocks in Hong Kong and a retreat in China, which is contending with rising Covid infections and deepening property-sector turmoil.

US futures inched up in the wake of another reversal for the S&P 500 on Monday. The index erased a 1% gain and ended lower on Apple’s intention to moderate some hiring and spending. European contracts were in the red, sapped by concerns about natural-gas supplies from Russia.

A dollar gauge fluctuated near a record high and Treasuries advanced, reflecting expectations for a short, sharp Federal Reserve interest-rate hiking cycle that gives way to cuts next year to shore up growth.

Corporate updates such as Apple’s are helping markets to calibrate the risk of recession. Signs that high inflation and monetary tightening are squeezing consumers and employment could feed into worries that an equity revival since mid-June is merely brief respite in a bruising bear market.

“We’re in a period over the next couple of weeks where corporate headlines are really going to drive market activity,” Anthony Saglimbene, global market strategist at Ameriprise Financial Inc., said on Bloomberg Television. The focus is on how labor and input costs and demand are shaping the outlook, he said.

In Europe, concerns are intensifying about gas supplies from Russia amid a standoff over its invasion of Ukraine. The European Union is preparing to tell members to cut gas consumption “immediately” to preserve supplies for winter, according to a report.

Crude dipped held above $100 a barrel and will likely stay there for the rest of the year, according to Iraq’s energy minister. Ether was among the leaders of a cryptocurrency rally.

Overall global market volatility is a sign of the struggle “to gauge whether we are seeing, one, peak inflation and two, peak interest rates,” Lale Akoner, strategist at BNY Mellon Investment Management, said on Bloomberg Television. She expects the US dollar to remain higher for the next six months.

Key events to watch this week:

  • Earnings this week include Netflix, Tesla
  • US Treasury Secretary Janet Yellen visits South Korea. Tuesday
  • Reserve Bank of Australia releases July minutes. Tuesday
  • UK Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey speak at event. Tuesday
  • Bloomberg Crypto Summit in New York. Tuesday
  • Bank of Japan, European Central Bank rate decisions. Thursday
  • Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.3% as of 6:47 a.m. in London. The S&P 500 fell 0.8%
  • Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 0.9%
  • Japan’s Topix index rose 0.5%
  • South Korea’s Kospi index fell 0.2%
  • Australia’s S&P/ASX 200 index lost 0.6%
  • Hong Kong’s Hang Seng Index fell 0.9%
  • China’s Shanghai Composite Index dipped 0.4%
  • Euro Stoxx 50 futures dropped 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro was at $1.0150
  • The Japanese yen was at 137.99 per dollar, up 0.1%
  • The offshore yuan was at 6.7514 per dollar, up 0.1%

Bonds

  • The yield on 10-year Treasuries fell two basis points to 2.97%
  • Australia’s 10-year bond yield rose seven basis points to 3.51%

Commodities

  • West Texas Intermediate crude was at $102.49 a barrel, down 0.1%
  • Gold was at $1 710.13 an ounce
© 2022 Bloomberg

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