Tech Fuels Stock Gains Despite Weak Economic Data: Market Shuffled

(Bloomberg) — A rally in the world’s biggest technology companies lifted stocks, as traders took their time with weak economic reports.

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The stock extended its advance in June, while Nvidia Corp. recovered after a drop of US$430 billion. The chipmaker suffered a three-day rout that sent it into a technical correction. Treasury bonds saw small moves ahead of a two-year, $69 billion auction that will kick off this week’s trio of note sales.

US consumer confidence declined due to a more subdued outlook for business conditions, the labor market and earnings. Home price gains slowed as potential buyers facing higher mortgage rates backed away. Fed Governor Michelle Bowman said she sees a number of upside risks to the inflation outlook and reiterated the need to keep borrowing costs elevated for some time.

For Vail Hartman, from BMO Capital Markets, Tuesday’s economic reports did not materially change the macro narrative.

“The job market is critical to future consumer spending,” said Jeff Roach of LPL Research. “Investors will be closely watching Friday’s personal income and spending release for any clues about the Fed’s future policy. Markets could be choppy if the Fed’s preferred inflation metric runs hotter than the expected.”

The S&P 500 halted a three-day slide. Nvidia rose about 3%. Carnival Corp. had an optimistic outlook. Peers Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. A rally in shipping stocks will face a crucial test Tuesday night when FedEx Corp. release results that will shed light on the strength of the US economy.

10-year Treasury yields were little changed at 4.24%. Bitcoin surpassed $62,000.

Investor positioning continued to reflect a preference for US stocks versus European stocks last week, according to strategists at Citigroup. A team led by Chris Montagu observed that the bullish positioning of the S&P 500 and the Nasdaq rose – but with slowing momentum in the latter.

Commodity Trading Advisors, or CTAs, are estimated to hold $130 billion in long positions – or the 84th percentile – in global equities, after selling $29 billion last week, and will likely sell more in all trading scenarios. market this week, according to Goldman. Sachs Group Inc.

Derivatives and equity flows specialist Cullen Morgan estimates that CTAs would sell $36 billion worth of stocks, including $2.8 billion in S&P 500 futures this week in a falling market, and $15 billion in stocks in a stable market. Even if the stock rose, they are expected to sell $3 billion worth of shares.

The story continues

Corporate Highlights:

• Boeing Co. has offered to acquire Spirit AeroSystems Holdings Inc. for about $35 a share in a deal financed primarily with stock, according to people familiar with the matter.

• Airbus SE is missing millions of parts that make up the company’s commercial aircraft, and the situation is getting worse, rather than better, for the world’s largest planemaker.

• Microsoft Corp. is at risk of a hefty fine from the European Union after regulators accused the company of abusing its market power by bundling video conferencing app Teams with its other business software.

• OpenAI has warned developers in China that it will begin blocking access to its tools and software from July, local media reported, suggesting that the creator of ChatGPT is taking a more active stance to bar users from countries where it does not offer services.

• AbbVie Inc. failed to win approval for a new Parkinson’s disease drug after U.S. regulators found problems at a contract manufacturing plant.

Main events this week:

• New home sales in the US, Wednesday

• China’s industrial profits, Thursday

• Eurozone economic confidence, consumer confidence, Thursday

• US Durable Goods, Initial Unemployment Claims, GDP, Thursday

• Nike releases results Thursday

• Japan Tokyo CPI, unemployment, industrial production, Friday

• US PCE Inflation, Spending and Income, Consumer Sentiment from the University of Michigan, Friday

• Fed’s Thomas Barkin Speaks on Friday

Some of the main movements in the markets:

Actions

• The S&P 500 was up 0.2% at 10:30 a.m. New York time

• The Nasdaq 100 rose 0.7%

• The Dow Jones Industrial Average fell 0.3%

• The Stoxx Europe 600 fell 0.3%

• The MSCI World index rose 0.2%

Coins

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.4% to $1.0694

• The British pound was little changed at $1.2677

• The Japanese yen was little changed at 159.67 per dollar

Cryptocurrencies

• Bitcoin rose 4.3% to $62,057.58

• Ether rose 2.8% to $3,403

Titles

• The 10-year Treasury yield was little changed at 4.24%

• Germany’s 10-year yield fell two basis points to 2.40%

• Britain’s 10-year yield fell two basis points to 4.07%

goods

• West Texas Intermediate crude fell 0.2% to $81.43 a barrel

• Spot gold fell 0.4% to $2,324.58 an ounce

This story was produced with help from Bloomberg Automation.

–With assistance from Vildana Hajric, Alex Nicholson, Jeran Wittenstein, Ryan Vlastelica, Aya Wagatsuma and Jason Scott.

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