Daily Digest: Tuesday 15th October
Europe
Tuesday’s session offered very little in terms of macro updates, though European chipmaker ASML drew significant attention globally as its Q3 earnings surfaced 24 hours earlier than scheduled. The firms net sales rose by around 19.6% between Q2 and Q3 while gross profits rose by 18%, with total sales for 2024 predicted to be €28 billion. However, it wasn’t the current data that drew trader attention, but rather it was the forward projections for 2025 issued by the firm. Markets were not only disappointed by sales expectations, but also a revised and weakened outlook on the firms business in China. By the close, ASML shares had fallen some 15.64% to €668.1, while Nvidia, the US chipmaker considered the poster child of the AI revolution saw its shares fall 4.52%.
The UK’s FTSE 100 (FTSE) saw an abrupt end to its recent rally, trading lower directly from the open and closing the session 43.38 points (0.52%) lower at 8,249.28. The Pan-European STOXX 600 (STOXX) experienced a similar turn in momentum as the index fell 4.19 points (0.80%) to 520.57, with tech sector concerns driving markets lower.
Heading into Wednesday, attention across Europe will turn to the UK’s annual CPI print and arguably more importantly, to ECB president Christine Lagarde’s remarks at the Slovenian central bank. The speech should hold a greater weight as traders look for verbal cues on the likely direction of the ECBs October interest rate decision, in order to finalise their bets on policy direction.
USA
Despite a strong start to the week, with both the Dow and S&P 500 reaching new all time highs, US equities experienced price reversals, matching that of European markets, driven by heavy tech sectors sell offs. The S&P 500 ($SPX) dropped 44.59 points (0.76%) to 5,815.26, erasing Monday’s gains. Meanwhile, the Nasdaq 100 ($NDX) fell 279.22 points (1.37%) to 20,159.83, and the Dow ($INDU) fell 324.80 points (0.75%) to 42,740.42.
Rest of the World
Sheltered from this afternoon’s tech sector rout, Japanese equities continued higher as traders returned to their desks after the nation’s Sports Day holiday. The Nikkei 225 (¥N225), Japan’s benchmark equity index, rose 304.75 points (0.77%) to 39.910.55, as investors eye the 40,000 level. Despite technical indicators remaining strong, it is likely Japanese equities will face sell offs into Wednesday as traders price in revised tech sector outlooks.
Chinese equities experienced a sharp end to Monday’s rally as sentiment soured, pushing the Shanghai Composite (¥SSE) down 83.03 points (2.53%) to 3,201.29.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice