Wednesday , December 19 2018

Tech leads stocks lower; dollar drops with yields

Bloomberg

A slide in technology shares sent most US equities lower, while Europe’s benchmark rose and Asian shares extended a losing streak as traders turned their focus to the outlook for monetary policy amid lingering worries for global trade.
Chipmakers extended their slide as Goldman and Stifel downgraded several US peers amid mounting industry concerns. Telecom stocks were also among Wednesday’s worst performers. Energy companies and miners were among the biggest winners in the Stoxx Europe 600 Index as the Bloomberg’s Commodity Index rose.
Semiconductors are “a key indicator for the broader technology sector, and for the general stock market going forward,” Matt Maley, an equity strategist at Miller Tabak & Co., said.
“If the semis do indeed break-down from here as we move through the rest of September, it could/should lead to investors to rotate away from the tech stocks in a more meaningful fashion than they did last week.”
The MSCI Asia Pacific Index was on course for a 10th consecutive decline, the longest losing streak since 2002.
Treasury yields eased and the dollar turned down after a softer-than-expected core producer-price inflation number crimped expectations for Federal Reserve tightening.
Brent crude traded near a two-month high as shrinking oil inventories pointed to an increasingly tight global market.
Central banks are back in the spotlight this week. Market participants are watching for policy meetings scheduled for the European Central Bank and Bank of England, as well as Turkish and Russian central banks. Meanwhile, investors will be gauging the potential for extreme weather to disrupt economic activity, as threats from trade tension and Brexit negotiations linger.
“It’s pretty clear they would like to get out of these negative rates,” Andrew Wilson, the global co-head of fixed income at Goldman Sachs Asset Management, said in an interview on Bloomberg TV.
“We’re still talking a year away — it’s not imminent.
If we see some continued tightening in the labor markets in Europe, that might be the catalyst for them to get back to zero. Again, we’re only getting back to zero.”
Elsewhere, emerging-market shares edged lower while their currencies climbed as India’s rupee jumped after an official said the government may announce measures to support the currency. Hungary’s forint fell as the country’s government faced possible censure for eroding democratic standards..
The yield on 10-year Treasuries fell two basis points to 2.95 percent, while the two-year note yield eased one basis point to 2.74 percent. Germany’s 10-year yield fell two basis points to 0.41 percent. Britain’s 10-year yield fell two basis points to 1.48 percent.

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