Morning Note: An update on today's market news.
Market News
US equity markets slipped last night – S&P 500 (-0.3%), Nasdaq (-1.1%) – as semiconductors endured a weak session. Nvidia’s 6.7% decline took its three-day slump to 13.4%, erasing $430bn from its market cap. That said, it’s only back to where it was at the beginning of June.
This morning in Asia, markets were mixed: Nikkei 225 (+0.9%); Hang Seng (-0.1%); Shanghai Composite (-0.4%). The yen strengthened to Y159.40 on continued talk of currency intervention. However, according to Sumitomo Mitsui DS Asset and Mizuho, the yen is at risk of sliding as far as 170 against the dollar as investors see few catalysts right now that would be powerful enough to reverse the current momentum.
The FTSE 100 is currently little changed at 8,287, while Sterling trades at $1.2685 and €1.1828. Airbus has cut its delivery goal and its A320 build rate. The target of 770 aircraft instead of 800 has been blamed on engine supply-chain snags. The shares are trading 8% lower this morning. The fallout has spilled across to UK aerospace stocks such as Rolls Royce (-3%) and Melrose (-4%).
The Federal Reserve’s Mary Daly warned the US labour market is nearing an inflection point, where further slowing may mean higher unemployment. She also said restrained demand may be needed to return inflation to the Fed’s 2% target. The 10-year Treasury currently yields 4.24%, while gold is steady at $2,327 an ounce.
The Federal Reserve showed US regulators a weaker version of a bank-capital overhaul, people familiar said. While there’s no updated estimate on additional capital that big banks would need, the proposed changes may put the buffer at as low as 5%, compared with the original 16%.
Canada is clamping down on imports of Chinese-made EVs. Janet Yellen said investment restrictions on the nation’s key technologies may be finalised by year-end. Separately, China Mobile is among carriers subject to a US probe over cloud concerns, Reuters reported.
The oil price was little changed at $85 a barrel as worries about China’s economic recovery prospects offset supply concerns stemming from tensions in the Middle East and Ukrainian attacks on Russian refineries. US crude oil stockpiles were expected to have fallen by 3m barrels in the week to 21 June, a preliminary Reuters poll showed on Monday.
Source: Bloomberg