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(Bloomberg) — Global stocks briefly fell as Tesla Inc.’s disappointing earnings capped a recent rally and investors braced for the European Central Bank meeting and U.S. economic growth data.
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Tesla shares fell more than 8% in pre-market trading in the U.S. after the electric car maker missed revenue expectations this year and showed signs of slowing growth. The Nasdaq 100 was trading flat, with traders focused on semiconductor maker Intel’s results later in the day.
International Business Machines rose 7% early after reporting a positive earnings outlook, but some other tech company earnings overwhelmed investors. European chipmaker STMicroelectronics NV fell after reporting softer customer orders and a weaker sales outlook. Two memory chip makers also fell following the results.
Europe’s Stoxx600 index was flat, while the blue-chip Euro Stoxx50 index rose 0.1% after surging to a 23-year high on Wednesday.
The pause comes after recent strength in stock prices, with investors increasingly confident that interest rates will fall this year and economic growth is likely to remain resilient.
“Equity markets don’t seem to be fixated on when the first rate cut will happen. What matters more is the mix of growth and inflation,” said Sotirios Nakos, portfolio manager at Aviva Investors. “If you have US growth that’s close to trend, slightly below trend in the UK and Europe, but still in a non-recessionary environment, that’s a supportive environment for risk assets.”
The ECB is expected to keep interest rates on hold until later in the day, but its statement and post-board press conference will be analyzed for clues about the way forward.
Similarly, US statistics show that the economy is expected to expand at an annual rate of 2% in the fourth quarter. A number of other statistics are also expected to be released, including inventory, new home sales and weekly jobless claims, which will provide an overview of the economy before the Federal Reserve’s meeting in late January.
A key focus for risk assets is the U.S. Treasury market, where long-term yields are rising. The 30-year Treasury yield rose to its highest level this year on Wednesday, but fell by about 2 basis points on Thursday. The rise was due to weak government bond auctions and expectations of a heavy government borrowing schedule.
The 10-year Treasury yield is about 4.16%, close to the level reached before the Fed’s dovish turn in December sparked a rally in bonds.
Earlier, Chinese and Hong Kong stocks rose after the People’s Bank of China scrapped plans to cut banks’ reserve requirements next month.
Questions persist about the effectiveness of such monetary stimulus, with analysts pointing out that RRR cuts have not boosted Chinese stocks in the past. But while the pledge provided some support for industrial metal prices, oil prices are now trading near a one-month high.
Company news:
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Boeing Co. shares fell as much as 2.4% in pre-market trading in the U.S. after the Federal Aviation Administration halted plans to increase production of the company’s most important model, the 737 Max.
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Wizz Air shares fell after lower-than-expected third-quarter revenue and profits, which the low-cost carrier blamed on Israel flight cancellations.
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Nokia Oysi said its Internet network infrastructure business could bring in sales and cost-cutting measures were successful, leading to a recovery in performance in the second half of the year.
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Swedbank reported its highest net interest income in at least a decade, but analysts highlighted the prospect of higher costs and a decline in fee income.
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Comcast Inc.’s Peacock streaming service gained 2.8 million new subscribers during the online-only NFL Wild Card Game on Jan. 14, according to estimates from research firm Antenna.
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Las Vegas Sands is rising in premarket trading after the casino resort reported better-than-expected fourth-quarter sales.
This week’s main events:
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Eurozone ECB interest rate decision Thursday
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Germany IFO Business Environment Thursday
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US GDP, new unemployment claims, durable goods, wholesale inventories, new home sales, Thursday
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Japan Tokyo CPI, Friday
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US Personal Income and Expenditures, Friday
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Bank of Japan issues minutes of policy meeting on Friday
The main movements in the market are:
stock
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As of 10:19 a.m. London time, the Stoxx European 600 was down 0.2%.
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S&P500 futures little changed
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Nasdaq 100 futures little changed
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Dow Jones Industrial Average futures rose 0.2%.
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MSCI Asia Pacific Index rose 0.3%
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MSCI Emerging Markets Index rose 0.6%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0895.
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The Japanese yen remained almost unchanged at 147.62 yen to the dollar.
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The offshore yuan fell 0.2% to 7.1760 yuan to the dollar.
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The British pound was almost unchanged at $1.2736.
cryptocurrency
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Bitcoin rose 0.5% to $39,984.01
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Ether rose 0.3% to $2,222.66
bond
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The 10-year Treasury yield fell 2 basis points to 4.16%.
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Germany’s 10-year bond yield rose 3 basis points to 2.37%.
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The UK 10-year bond yield rose 4 basis points to 4.05%.
merchandise
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Brent crude rose 1.4% to $81.19 per barrel
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Spot gold rose 0.2% to $2,018.04 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Ruth Carson, Tassia Sipahutar, and Chiranjivi Chakraborty.
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©2024 Bloomberg LP
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