Tech sell-off hits global stocks; Treasuries gain

Bloomberg

Stocks fell from London to Shanghai and US equity futures signaled the global rout led by technology shares would deepen on Tuesday, adding pessimism to markets already anxious over trade. Treasuries advanced and the dollar edged higher.
Contracts on all major US equity indexes pointed to declines at the open, with megacap tech shares leading the drop. The Stoxx Europe 600 Index fell a fifth day as its technology sector headed toward a bear market. Equities slid across Asia after US software developers and chip makers dragged the S&P down on Monday.
Apple slumped 2.7 percent and is headed for a bear market, while every member of the FANG cohort was down at least 1.5 percent. Semiconductors sank, with Nvidia, Micron and AMD down at least 5 percent. Target plunged 10 percent after margins narrowed and sales growth slowed; L Brands and Kohl’s Corp. both fell more than 7 percent. Lowe’s slid more than 6 percent on poor results.
Treasuries rose, driving the 10-year yield down to its lowest level since September, ahead of the US Thanksgiving holiday on Thursday. A credit-default swap index of mostly high-yield issuers in Europe reached the highest in almost two years, signaling renewed nerves about the asset class.
After the downdraft last month, equity markets are struggling for footing in November as some of the technology companies that helped drive the S&P 500 to a record high earlier this year tumbled amid a slowdown in consumer sales and fears over regulation. At the same time, a more gloomy macro outlook is emerging, with Goldman Sachs recommending investors hold more cash. Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said that investors should expect low returns for a long time after enjoying years of low interest rates from central-bank stimulus.
Elsewhere, the pound stabilised as Theresa May appealed to business leaders to help deliver her Brexit deal, and evidence mounted that a plot to oust her as UK Prime Minister is faltering. WTI crude oil futures hovered around $57 a barrel.
It’s a shortened trading week because of the Thanksgiving holiday in the US on Thursday.
The Stoxx Europe 600 Index decreased 0.8 percent in New York, hitting the lowest in more than three weeks with its fifth consecutive decline. Futures on the S&P 500 Index sank 1.1 percent to the lowest in more than three weeks. The UK’s FTSE 100 Index declined 0.4 percent.
Germany’s DAX Index declined 1.1 percent. The MSCI Emerging Market Index sank 1.2 percent. The MSCI Asia Pacific Index sank 1 percent, the biggest dip in more than a week.
The Bloomberg Dollar Spot Index gained 0.1 percent, the largest rise in more than a week. The euro declined 0.3 percent to $1.1417, the first retreat in more than a week. The British pound fell 0.1 percent to $1.2839. The Japanese yen increased 0.2 percent to 112.35 per dollar, the strongest in more than three weeks.
The yield on 10-year Treasuries declined two basis points to 3.04 percent.