As so often with Beijing’s policy changes, investors seemed underwhelmed with the move in part because it merely underlines how anaemic the recovery has been. Chinese blue chips retreated around 0.6%, having enjoyed a rare bounce last week.
Much of Asia was also in the red, with Taiwan taking a beating amid worries about U.S. restrictions on chip sales and the risk a Trump administration would slap tariffs on a host of imports, possibly triggering a global trade war.
Tech stocks saw notable rotation out to smaller caps and banks last week, erasing about $900 billion from the S&P 500 technology sector. A pullback was no surprise given Alphabet, Tesla, Amazon.com, Microsoft, Meta Platforms, Apple and Nvidia have accounted for around 60% of the S&P 500’s gains this year.
That set the stage for a host of second-quarter earnings this week, with Tesla and Google-parent Alphabet starring for the “Magnificent Seven” megacap group.
Expectations are high with annual earnings seen climbing 17% for tech and 22% for communications.
