Tech shares slide deepens as bonds drop, oil breaches $70

Bloomberg

The biggest technology shares fell for a third day as investors showed signs of exhaustion with the sector amid a slew of corporate earnings. Government bonds declined ahead of
key policy meetings from some of the world’s biggest central banks.
The Nasdaq 100 Index sank almost 1 percent as the FANG cohort tumbled 2.2 percent, led by Netflix Inc. The group of tech megacaps is off 8.7 percent in the three sessions since Facebook Inc.’s results triggered a record evaporation of market value.
Twitter Inc. joined the slide, retreating almost 4 percent. Anxiety that tech shares have become overvalued persists as Apple Inc. prepares to report earnings.
The euro climbed and the dollar dropped. US oil futures climbed past $70 a barrel for the first time in more than a week as a weaker dollar boosted the appeal of commodities and concerns over global supply disruptions persisted.
The tech selloff comes as equity strategists tell clients to allocate more defensively, with Morgan Stanley’s Michael Wilson saying the sector is showing signs of “exhaustion” after months of outperformance.
Investors are also prepping for central bank policy decisions, with traders focussed on whether the BOJ will fine tune its policy and look for any indications the Federal Reserve is shying away from two more interest-rate hikes before the end of this year.
Meanwhile, the Bank of England is widely expected to increase borrowing costs.
Elsewhere, emerging-market stock fluctuated after a four-day winning streak. Turkey’s lira fell as the country’s president showed little regard for potential US sanctions.
The US Treasury is set to release its funding programme for the next three months on August 1. Earnings season continues with Berkshire Hathaway, Barclays, Tesla, Toyota, BMW, and Rio Tinto among companies reporting results. Central banks in the US, Japan, the UK, Brazil and India all meet this week. The BOJ may tweak its yield-curve control policy and cut its CPI forecasts, while the Bank of England is expected to hike even amid Brexit gloom. The Fed is seen standing pat, as is Brazil’s central bank. The RBI will probably raise its benchmark. US personal spending and income data for June may be steady. Then it’s the jobs report on Friday, which is predicted to show a healthy labour market, with 193,000 new jobs, and an unemployment rate slipping back to 3.9 percent. China’s PMIs probably edged down in July, analysts say, buffeted by a deleveraging agenda and a trade war.
The S&P 500 Index slipped 0.1 percent in New York; the Nasdaq Composite fell 0.8 percent while the Dow was little changed. The Stoxx Europe 600 Index fell 0.2 percent.
The MSCI Emerging Market Index dropped 0.1 percent.
The Bloomberg Dollar Spot Index dipped 0.3 percent. The euro rose 0.5 percent to $1.1713. The British pound gained 0.3 percent to $1.315. The Turkish lira fell 0.6 percent.
The yield on 10-year Treasuries rose two basis points to 2.98 percent, the highest in almost 10 weeks. Germany’s 10-year yield rose five basis points to 0.45 percent. Britain’s 10-year yield jumped six basis points to 1.34 percent, the highest in almost seven weeks. Japan’s 10-year yield decreased less than one basis point to 0.091 percent.
The Bloomberg Commodity Index increased 0.7 percent to the highest in three weeks.
West Texas Intermediate crude jumped 2 percent to $70.04 a barrel. Copper was little changed at $2.803 a pound. Gold was little changed at $1,224.80 an ounce.