📆 Friday, July 12
► European shares extended gains, driven primarily by the telecommunications sector following cooler-than-expected US inflation data and earnings from Ericsson, which surged over 6%. The Stoxx Europe 600 index rose 0.3%, despite mixed movements in the technology sector, with chipmakers such as ASML Holding and ASM International following their US counterparts lower. Additionally, inflation in Spain eased to 3.4% in June from 3.6% in May, aligning with expectations, while France saw its inflation rate drop to 2.2% from 2.3%, slightly better than anticipated.
► US stock futures remained stable after a significant tech-led selloff on Wall Street. The Nasdaq dropped 2.2% despite cooler-than-expected US inflation data bolstered the case for Federal Reserve interest rate cuts. The stark rotation out of the big tech sector is seen by some analysts as one of the strangest market reactions ever (according to SmartTrader chief analyst Robert Lindner, a short-term correction was long overdue after the recent non-fundamental-driven excess gains), especially since most of the market, including small-cap stocks, ended yesterday's trading day in the green. Treasury yields are steady today, with 10-year yields at 4.21% after yesterday's significant slide across the yield cure. The USD hovered near a five-week low after a substantial drop. Investors are now focused on upcoming earnings reports from major banks such as Citigroup, JPMorgan, and Wells Fargo, and producer price data (PPI) set for release later.
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