Investors await key US economic data delayed by the federal government shutdown, as expectations of Fed rate cuts fade. The market is hoping to get clues about the health of the world’s largest economy with the September jobs report, due out Thursday. In the meantime, tension is at its highest in the markets where profit-taking with large technology companies is taking place for fear of a bubble in the spotlight. Stock markets open this Thursday with significant declines. while Bitcoin reached its lowest level in seven months.
What does the Ibex 35 do?
The Ibex 35 opens with a decline of 1.5% and loses the psychological level of 16,000 points after closing yesterday below 16,200 points.
Which values rise and fall the most?
Only Solaria and Redeia go up.
Those who fall the most:
Indra: -3.1%
ArcelorMittal: -2.1%
Banking: -2.1%
What are other stock markets doing?
European indices lose around 1%. For its part, in Japan, the Nikkei closed 3% lower after government representatives of Japan and China met this Tuesday in Beijing to try to reduce the bilateral tension that has escalated in recent days over Taiwan. The meeting took place between the director of the Asian and Oceanic Affairs Bureau of the Japanese Foreign Ministry, Masaaki Kanai, and his Chinese counterpart, Liu Jinsong, after the diplomatic dispute began to affect sectors such as tourism, education and entertainment, with calls for mutual boycotts.
In China, the Shanghai Composite index closed 0.8% lower. For its part, Hong Kong’s Hang Seng lost more than 1%.
Wall Street closed in the red last night and its main indicator, the Dow Jones, fell 1.18% after another day of volatility and selling of stocks in the technology sector. The S&P 500 index also fell, by 0.92%, and the Nasdaq, by 0.84%. Volatility increased about 13%, according to the Vix index, known as a gauge of “fear” in the stock market. Big tech companies, particularly those linked to artificial intelligence (AI), remain in the spotlight, amid doubts about the sustainability of their growth and the possibility of a bubble. Futures bounce slightly.
The keys of the day
- The main references this week for the stock markets will be the results of Nvidia (which will be released on Wednesday and which, according to Bank March, have become an event of macroeconomic dimensions due to doubts surrounding the technology sector and its high valuations) and the September employment report in the United States (which will be published on Thursday), the publication of which in October was delayed due to the government shutdown of the North American country.
- The market expects that the Federal Reserve (Fed) will be able to maintain interest rates in December and not cut them. Several regional presidents have expressed their rejection of a new cut due to a possible increase in inflation, while other members of the central bank have expressed fears over the deterioration of the labor market in recent months.
- For his part, Federal Reserve Governor Christopher Waller has called for further interest rate cuts to revive the job market.
- Japan’s new Prime Minister Sanae Takaichi meets Bank of Japan Governor Kazuo Ueda as markets speculate on interest rates. Ueda indicated the possibility of an interest rate hike next month. However, Takaichi and his Finance Minister Satsuki Katayama have made clear their preference for rates to remain low until inflation steadily reaches the Bank of Japan’s 2% target.
What do the analysts say?
DWS analysts believe that beyond high valuations, the growing interdependence between AI companies could become a problem. It is becoming increasingly complex to identify whether a company is acting as a customer, strategic partner, investor or competitor. The AI sector appears to have become almost self-sustaining. Its investment director, Vincenzo Vedda, believes diversification is essential, even within the equity segment itself. “We are now more constructive towards German stocks again, which have hardly moved since the end of May,” he adds. The positive effects of the ambitious public spending programs for defense and infrastructure should appear next year, which would put an end to the current phase of price stagnation, he indicates.
Wolf von Rotberg of J. Safra Sarasin Sustainable AM: “Third-quarter corporate earnings in the US continue to be extraordinarily strong, as can be seen after 87% of S&P 500 companies reported results. The earnings strength extended beyond the technology and financial sectors, with utilities and other defensive sectors contributing. Cyclical sectors also posted strong annual growth, although this was largely driven by consumer companies. We believe that the season confirms the fragmented macroeconomic picture: AI and high-income consumers continue to support, while other sectors and low-income consumers lag In this sense, the results of Walmart, Target and Home Depot will be in focus for further indications on the health of US consumers. Nvidia will also be in the spotlight on Wednesday.
What is the evolution of debt, currencies and commodities?
The euro is approaching the $1.16 level.
Brent oil, the benchmark in Europe, fell 0.65% to $63.79 a barrel.
Stock Markets – Currencies – Debt – Interest Rates – Commodities
