The tech stock sell-off goes global, with heavy sector losses in Asia and Europe. Ten-year bond yields settle into a range around 1.47%, ahead of Fed Chair Jerome Powell’s last speech before the next policy meeting. Jobless claims are due and OPEC meets with Russia to set output quotas for April.
Global tech sell-off continues; metals also hit
Selling of technology stocks across the world continued overnight after another rise in bond yields triggered sharp losses in the Nasdaq Composite on Wednesday.
China’s Shanghai Shenzhen CSI 300 lost over 3% in Thursday, session, while South Korea’s KOSPI lost 1.5%. The EURO STOXX Technology index also fell almost 3%, with chipmakers and payments companies – two of the hottest sub-sectors in recent months – giving up the most.
Losses weren’t confined to tech, however. Base metals also sold off sharply, correcting after a mammoth rally so far this year. Copper futures fell nearly 5% to trade back below $4 a pound, while Nickel Futures in London lost 7.5% – both of which were reflected in sharp drops in London-listed mining stocks.
The U.S. 10-Year yield, meanwhile, stabilized around 1.47%.
Jobless Claims and Powell to set the tone
The increasing unease about the path of interest rates will ensure a sharp focus on Federal Chairman Jerome Powell’s speech at 12:05 PM ET, his last scheduled appearance before the Fed’s top brass enters its usual pre-meeting quiet period.
None of the Federal Open Markets Committee’s most influential members have signaled any real concern about bond yields so far in their public comments, focusing rather on the underlying weakness in the labor market.
That is likely to be on show again at 8:30 AM ET, when the week’s jobless claims are released. Analysts expect a modest increase in initial claims to 750,000. U.S. durable goods orders data for February are out at the same time, while the Challenger Job Cuts survey for February is due an hour earlier.
Stock sell-off set to continue
U.S. stocks are seen extending Wednesday’s losses when they open again later, on fresh fears that a rise in interest rates will undermine the case for the heroic valuations still commanded by many companies, especially in the tech space.
By 6:30 AM ET, Dow Jones futures were down 147 points, or 0.5%, while S&P 500 futures were down 0.7% and Nasdaq 100 futures were again underperforming with a drop of 0.9%. Tesla, Apple, Nvidia, Microsoft and Advanced Micro Devices stock were all clearly down in premarket trading. Amazon stock was down by slightly less, after news that it is in talks to secure exclusive streaming rights for a large number of NFL games.
Broadcom will release earnings after the closing bell.
OPEC+ meet to set April quotas
The world’s largest oil exporters will set production quotas for April, having broken with tradition by not leaking much of their intentions ahead of time. The pre-meeting of OPEC’s market monitoring committee ended without a formal recommendation to the ministers who will start thrashing out a deal at 8 AM ET (1300 GMT).
Analysts suggest that a net increase in output of anything less than 1.5 million barrels a day will be bullish for prices, arguing that global demand has recovered enough to absorb the extra supply. The big unknown is how quickly Saudi Arabia will unwind the 1 million b/d cut that it made unilaterally for February and March. That number is unlikely to be captured in the headline announcement by OPEC.
Crude prices have eased a little overnight: WTI Futures were down 0.3% at $61.09 a barrel, while Brent crude was down 0.3% at $63.91 a barrel.
Melvin claws back less than half its losses
The hedge fund targeted by users of a Reddit chatboard in the epic short squeeze of GameStop (NYSE:GME) stock and others was still showing the scars of that fight last month.
CNBC, citing anonymous sources, said Melvin Capital posted a 21.7% return for February after losing 53% in January as retail traders forced it to unwind its big bet against the video games retailer in a hurry.
Melvin had been rescued by capital injections from Steven Cohen’s Point 72 investment firm and Ken Griffin’s Citadel – the latter being the company that is the biggest buyer of order flow data from online brokerage Robinhood.