Tech Sector Leads Shares Decrease; Greenback Strengthens: Markets Wrap

(Bloomberg) — U.S. stock declined and Treasury yields fluctuated as investors assessed a growth slowdown in China and Federal Reserve Chair Jerome Powell’s persistent dovishness despite a hawkish tilt across global central banks.

Communication services and technology shares weighed on the benchmark S&P 500, while financials gained after Morgan Stanley posted its second-most profitable quarter on record. Growth favorites such as Amazon.com and Google parent Alphabet dropped from recent all-time highs, sending the Nasdaq 100 lower. Biogen slumped.

Powell reiterated that it was still too soon to scale back monetary support even though inflation has risen faster than expected. China’s second-quarter growth slowed largely in line with expectations even as a pickup in consumer spending suggested a more balanced recovery.

“It’s possible that we’ve reached peak growth, but that doesn’t necessarily mean the cycle is rolling over,” Giorgio Caputo, senior fund manager at J O Hambro Capital Management. “That being said, when you factor in those peak growth concerns, as well as what’s been going on with the delta variant and the way interest rates have been declining, it does seem like we’re having a little bit of a growth scare.”

The Fed’s potential timeline for tapering $120 billion in monthly bond purchases, and the spread of the delta Covid-19 variant, are among key variables bothering investors with global stocks near all-time highs. Another concern is the possibility that recoveries in economic growth and corporate earnings are peaking. Powell addressed the Senate banking panel.

Europe’s Stoxx 600 gauge dropped for a second day, dragged down by energy shares. The benchmark for emerging-market equities, however, rose to a one-week high on Thursday, amid a report overnight of possible cooperation between Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

The Bloomberg Dollar Spot Index erased losses and rose for the third time in four days. West Texas Intermediate crude futures fell on expanding U.S. fuel inventories and a potential OPEC+ agreement to increase supply.

Bank of England monetary policy committee member Michael Saunders said that if economic activity and inflation remained in line with current trends, it may become appropriate “fairly soon” to withdraw some of the stimulus. The speech, released on the bank’s website, sent the pound to the lone advance among Group-of-10 peers against the dollar.

For more market commentary, follow the MLIV blog.

Here are some events to watch this week:

Bank of Japan interest rate decision Friday

These are some of the main moves in financial markets:

Stocks

The S&P 500 fell 0.4% as of 12:07 p.m. New York timeThe Nasdaq 100 fell 0.9%The Dow Jones Industrial Average was little changedThe Stoxx Europe 600 fell 0.9%The MSCI World index fell 0.4%

Currencies

The Bloomberg Dollar Spot Index rose 0.3%The euro fell 0.3% to $1.1803The British pound fell 0.1% to $1.3840The Japanese yen was little changed at 110.04 per dollar

Bonds

The yield on 10-year Treasuries declined three basis points to 1.32%Germany’s 10-year yield declined one basis point to -0.33%Britain’s 10-year yield advanced four basis points to 0.66%

Commodities

West Texas Intermediate crude fell 0.8% to $72.58 a barrelGold futures were little changed

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