Tech giants call time on stocks rally, U.S. payrolls loom

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A global stock rally, powered by hopes of central banks ending aggressive rate rises, ran into roadblocks following weak earnings from U.S. tech giants and as key U.S. jobs data loomed. | Reuters

In Europe, the Stoxx 600 share benchmark fell 0.6 percent. Germany’s benchmark 10-year bond yield inched 2 basis points higher to 2.097 percent, having on Thursday dropped by the most since 2011 as the price of the debt rallied.

The mood turned much more cautious on Thursday, however, as U.S. tech shares took a beating in U.S. after-hours trading. “If we are seeing an easing of net job creation that would allow the Fed to just do one more rate hike of 25 basis points and that would be the end of the cycle,” said Willem Sels, global chief investment officer at HSBC’s private bank.“We will see headwinds from further earnings downgrades, but we have incorporated quite a lot [of this] already so I think markets can hold here if we are indeed right on the Fed.

Alan Ruskin, macro strategist at Deutsche Bank, said that given the current market price action ahead of the U.S. payrolls data, a softer report would be regarded as endorsing all the favourite trades of the year. In currency markets, the euro extended losses to $1.0888, pulling further away from Thursday’s 10-month top of $1.1033.

 

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