Premarket: Global stocks slide in reality check from big cap earnings

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Greenback gains as investors banked on a more moderate decline in U.S. interest rates

Global stocks fell on Wednesday after gloomy results from European heavyweights LVMH and tech company ASML dented sentiment, while the dollar gained as investors banked on a more moderate decline in U.S. interest rates.

Meanwhile, shares in LVMH, considered a play on the Chinese consumer almost more than anything else, tumbled by the most in a year after reporting weaker than expected third-quarter sales. With the optimism washing through markets over China’s recent stimulus measures, the results were not what investors wanted to see, leaving Paris’ CAC 40 down 0.6% and the STOXX 600 down 0.3%.

With stocks within a whisker of record highs and valuations looking pricey, analysts said there was plenty of scope for volatility, not least because of the political backdrop. On the macro side, data earlier on Wednesday showed British inflation slowed more than expected last month, cementing expectations for the Bank of England to cut rates at least once, if not twice, this year.

Traders are pricing in 46 basis points of rate cuts this year. Less than a month ago, after the Fed lowered rates by half a point, the expectation was for nearly 80 bps in cuts.

 

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