The broader narrative running through markets on Wednesday was more downbeat than Tuesday – and less coherent – after the leaders of the G4 central banks sent hawkish signals from the European Central Bank’s annual jamboree in Sintra, Portugal.
Wall Street struggled under the weight of rising U.S. rate expectations, the dollar rose and Treasuries rallied, and the U.S. yield curve inversion deepened a bit. So far, so ‘risk off’.
But U.S. equity market volatility fell, oil jumped, Apple shares climbed to a new all-time high, and other mega tech stocks rose too.
Asian tech may rise in sympathy on Thursday, but the sector is one of the major sources of U.S.-Sino tensions – U.S. officials are considering tightening an export control rule designed to slow the flow of artificial intelligence chips to China by clamping down on the amount of computing power the chips can have.
On the macro front, another plunge in Chinese industrial profits was yet another reminder of the difficulties the world’s second largest economy is experiencing.
Annual profits at China’s industrial firms extended a double-digit decline in the first five months as softening demand squeezed margins.
