Morning Markets: Tech for sale

Watchlist

• Japan: CPI (published)
• Japan: Household spending (published)
• France: GDP first estimate (published)
• France: Household consumption expenditure on manufactured goods (published)
• France: Provisional CPI (published)
• Spain: CPI flash estimate (0700 GMT)
• Spain: Preliminary GDP (0700 GMT)
• EU: Business and consumer surveys (0900 GMT)
• Germany: Provisional CPI (1200 GMT)
• Canada: GDP (1230 GMT)
• US: GDP advance estimate (1230 GMT)
• US: Univ. of Michigan consumer survey (1400 GMT)

Tech shares have been knocked in Asian trading, signalling that the week might end with a day in red. Stocks of Amazon, which had surged recently, fell in after-hours US trading after the company issued a disappointing outlook. So Amazon's founder, Jeff Bezos, only briefly remained the world's richest person before having to cede that title back to Microsoft founder Bill Gates.

The Economic Sentiment Index (ESI) for the whole Eurozone is expected to drop slightly, to 110.9 from 111.1 in June. The expected 0.2-point fall would be just a fraction of the 1.2 point increase seen in June.

The June reading was the highest since August 2007 – right before the great financial crisis began. The stock markets have tended to move together with the sentiment index. As sentiment improves, so do stock prices. This implies that longer-term it makes sense to look at whether the sentiment index is close to historical highs, with little apparent room to improve.

The median forecast for US GDP growth during the second quarter is 2.7% (the seasonally adjusted annualised rate). The growth in the first quarter was very weak at only 1.4%, but in recent years this has been very common, and the first-quarter weakness is widely believed to be transitory. 

Market signals

Asian session

• Asian markets headed lower as Thursday's selloff on the Nasdaq spread to the region
  
• Samsung Electronics shares were down by hefty 4.5% at 0523 GMT
  
• Korea's Kospi Composite was down by 1.33% to 2,410.84 at 0454 GMT
• Japan's Nikkei 225 took a tumble; it was down 0.61% to 19,958.06 at 0454 GMT
  
• Hong Kong's Hang Seng retreated as well; it was down 0.65% to 26,954.34 at 0515 GMT
• Japan's CPI rose at a steady pace in June, up 0.4%, marking the sixth monthly gain
• Japanese household spending surged 2.3% year-on-year in June
• Japan's spending snapped 15 months of decline; a rise of 0.6% had been expected
• Australia's quarterly producer price index came in at 0.5%
• Drops for Australia's banks dragged the S&P/ASX200 sharply lower
  
• The S&P/ASX200 closed down 1.5% at 5,698.00 points
  

Forex ahead

• USD retreated against the yen; it was worth ¥111.0310 at 0516 GMT
  
• The volatile AUD slipped back below 0.80; it was worth 0.7966 at 0514 GMT

In opinion

1..2..3
The main event today is the release of the US GDP growth for Q2, where a welcome higher reading is expected after the weakness seen in Q1, writes Juhani Huopainen.

Slight slippage
Iron ore slipped 0.3% to $70.20/tonne with a bullish forecast from Goldman Sachs doing little to boost sentiment, explains Saxo's Sydney trading team.

Under pressure
Asian markets felt the pressure in early trade after the USD strengthened overnight on the back of better-than-expected durable goods orders, says Saxo's Singapore trading team.

Shares in Samsung Electronics tumbled today, dragging Korea's Kospi Composite lower, as the tech selloff spread from the US to Asia. Photo: Shutterstock

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