ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
Featured Posts
    • Companies
    Privatising water was never going to work
    • August 19, 2022
    • Latest News
    Cineworld prepares for US bankruptcy filing
    • August 19, 2022
    • Companies
    WWE: body-slammed boss dives out as new champ grapples sale rumours
    • August 19, 2022
    • Markets
    Net zero targets: Ask what you can do for your country . . . 
    • August 19, 2022
    • Latest News
    UK health body calls for upgrade to sewage system as beaches close
    • August 19, 2022
Featured Categories
Belarussia
View Posts
Companies
View Posts
Energy
View Posts
Environment
View Posts
Food
View Posts
Governance
View Posts
Health
View Posts
Investors
View Posts
Latest News
View Posts
Markets
View Posts
Potash
View Posts
Regulators
View Posts
Russsia
View Posts
Social
View Posts
Supply Chain
View Posts
Sustainable Finance
View Posts
Technology
View Posts
Uncategorized
View Posts
ESG Telegraph ESG Telegraph
7K
9K
4K
1K
ESG Telegraph ESG Telegraph
  • Home
  • Latest News
  • Environment
  • Companies
  • Investors
  • Governance
  • Markets
  • Social
  • Regulators
  • Sustainable Finance
  • Latest News

US stocks snap gains to fall sharply after downbeat tech earnings

  • February 3, 2022
  • Staff
Total
0
Shares
0
0
0

Wall Street equities snapped four days of gains to fall sharply on Thursday after disappointing updates from Facebook owner Meta and other pandemic-era stock market winners ricocheted through the tech sector.

The Nasdaq Composite fell 2.4 per cent as shares in Meta, one of the largest constituents of the tech-heavy index, dropped by a quarter, shedding more than $200bn of its value.

Meta overnight reported its first decline in daily active users and warned of increased competition from rivals such as ByteDance’s TikTok platform.

The S&P 500 share gauge dropped 1.5 per cent. Wall Street has suffered its worst January since 2009, driven largely by falls in tech stocks that dominate the US indices, and the equity benchmark has lost about 5 per cent this year.

Shares in PayPal had declined by a quarter on Wednesday after the payments company warned that a weakening ecommerce environment would slow its growth rate. Music streaming platform Spotify also delivered a weak outlook for first-quarter subscriber growth.

Shares in many tech companies rose during the pandemic, fuelled by a combination of coronavirus lockdowns keeping customers at home and ultra-low interest rates increasing the appeal of more speculative investments.

But this year, some traders have started to believe coronavirus is becoming milder and the US central bank has signalled that it is poised to rapidly raise borrowing costs, casting a pall over Wall Street’s tech titans.

“Fingers have been hovering over the sell trigger for the tech sector,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham. “So when you get an announcement like [Meta’s], investors see the beginning of the end.”

Shares in Amazon fell 7 per cent on Thursday, but social media companies were hit harder. Snap dropped 20 per cent and Twitter fell almost 6 per cent.

“The spillover is a natural phenomenon in any equity sector, as there are basket trades,” Perdon said. “But we are making the distinction between tech that still has the prospect to deliver and unprofitable tech.”

In Europe, the regional Stoxx 600 share index fell 1.8 per cent, with its tech sub-index dropping 3.5 per cent.

European government debt sold off on Thursday as central bank moves increased nerves about interest rate rises and sustained inflation, which reduce the appeal of the fixed income-paying securities.

The yield on the UK’s benchmark 10-year gilt climbed 0.12 percentage points to 1.38 per cent, representing a significant fall in the price of the debt, after the Bank of England raised interest rates by a quarter point to 0.5 per cent and bumped up its inflation forecast to an April peak of 7.25 per cent.

Germany’s equivalent Bund yield added 0.11 percentage points to 0.14 per cent, after European Central Bank president Christine Lagarde, in a press conference, declined to rule out lifting interest rates this year. Eurozone inflation hit a record of 5.1 per cent in January.

Ahead of Lagarde’s statement, traders had been concerned that the ECB chief would be overly dovish — prompting fears of the eurozone rate-setter keeping monetary policy loose for too long then tightening rapidly.

“Markets will [still] focus on the ECB now being behind the curve and start to price in more rate hikes,” said David Zahn, head of European fixed income at Franklin Templeton.

Italy’s 10-year bond yield jumped 0.22 percentage points to 1.64 per cent.

The euro rose 1.1 per cent against the dollar to $1.142.

Unhedged — Markets, finance and strong opinion

Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here to get the newsletter sent straight to your inbox every weekday

Total
0
Shares
Share 0
Tweet 0
Pin it 0
You May Also Like
Read More
  • Latest News

Cineworld prepares for US bankruptcy filing

  • Staff
  • August 19, 2022
Read More
  • Latest News

UK health body calls for upgrade to sewage system as beaches close

  • Staff
  • August 19, 2022
Read More
  • Latest News

Italy election frontrunner Giorgia Meloni says she will not put Covid funds at risk

  • Staff
  • August 19, 2022
Read More
  • Latest News

Air travel chaos begins to ease but is there more trouble on the horizon?

  • Staff
  • August 19, 2022
Read More
  • Latest News

Starling Bank’s Anne Boden: ‘I was ashamed to be a banker’

  • Staff
  • August 19, 2022
Read More
  • Latest News

Trump’s turmoil poses a conundrum for Republicans

  • Staff
  • August 19, 2022
Read More
  • Latest News

Chinese tycoon Xiao Jianhua sentenced to 13 years in jail for financial crimes

  • Staff
  • August 19, 2022
Read More
  • Latest News

A new strain of avian flu is decimating wild birds. Humans should worry

  • Staff
  • August 19, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Featured Posts
  • 1
    Privatising water was never going to work
    • August 19, 2022
  • 2
    Cineworld prepares for US bankruptcy filing
    • August 19, 2022
  • 3
    WWE: body-slammed boss dives out as new champ grapples sale rumours
    • August 19, 2022
  • 4
    Net zero targets: Ask what you can do for your country . . . 
    • August 19, 2022
  • 5
    UK health body calls for upgrade to sewage system as beaches close
    • August 19, 2022
Recent Posts
  • How Tiger Global withdrew its claws when the tech bubble burst
    • August 19, 2022
  • More smelters face threat of closure as Europe enters a power-starved winter
    • August 19, 2022
  • Italy election frontrunner Giorgia Meloni says she will not put Covid funds at risk
    • August 19, 2022

Sign Up for Our Newsletters

Subscribe now to our newsletter

ESG Telegraph
  • Home
  • Privacy Policy
  • Guest Post
  • Contact

Input your search keywords and press Enter.