A look at the day ahead in U.S. and global markets from Mike

Dolan

Nvidia ( NVDA ), the Nasdaq and the S&P500 got dizzy at record highs

on Thursday as world markets start to take stock of a bumper

2024 as we near the half-year point next week - but with the

dollar back on the march regardless.

The latest U.S. economic readouts showing some cooling of

activity through May and June, but the trigger for the megacap

recoil was less than clear - not least with the Atlanta Federal

Reserve's "GDPNow" real-time estimate still showing a brisk 3%

growth for the quarter.

The scale of recent tech gains may just have been too fast

as midyear accounting prompts a breather - and perhaps investors

are now bracing for a bumpier second half into November's U.S.

election. Next Thursday's presidential TV debate may sound the

klaxon for that.

Either way, Nvidia's ( NVDA ) 3.5% drop on the day meant it

surrendered its brief role as the most valued company to

Microsoft ( MSFT ) again and the tech-heavy Nasdaq ended

a seven-day streak of record closing highs.

The wider equity complex was more mixed, however, with the

blue-chip Dow Jones gaining 0.7% and the small-cap

Russell 2000 flat on the day.

Despite another softening of Treasury yields

after misses on housing starts and jobless claims, the dollar

continued to build a head of steam.

And greenback gains were pretty broad-based - against the

European currencies where central bank rate cuts and easing bets

are mounting, but also against Japan's yen and China's

yuan in Asia. The DXY index touched its highest in almost

two months.

Foreign money is exiting China again - amid rising global

trade tensions and little sign of an end to the deepening

housing bust there, Chinese stocks and the yuan

had another poor end to a dour week.

About 33 billion yuan ($4.54 billion) left the mainland this

month via the Northbound leg of the Stock Connect Scheme -

following four months of net inflows.

With one eye on the Chinese Communist Party's central

committee plenum next month, G7 countries upping pressure on

Chinese electric vehicle exports and Beijing considering

retaliation, the yuan slipped to its weakest this year on

Friday.

China's commerce ministry said on Friday the European Union

has continued to escalate trade friction, which "may trigger a

trade war."

Japan's yen is weakening rapidly again too - with doubts

about the timing of Bank of Japan tightening reinforced by

below-forecast inflation numbers that saw consumer price growth

excluding energy and fresh food falling to just 2.1% last month.

That has sent dollar/yen back above 159 for the first time

since late April, when the BoJ last intervened to cap it, and

elicited another series of warnings from Japanese officials.

With the Swiss National Bank's second interest rate cut of

the year on Thursday ringing in the background, the dollar

climbed against European currencies too.

Sterling fell to its lowest level in over a month

even after the Bank of England left its policy rates steady

ahead of the July 4 UK election, as bets on an August rate cut

there rose when the BoE indicated that its 7-2 policy-maker

split in favour of holding the line was "finely balanced".

News of a rebound in British retail sales last month after a

weather-related bust in April did little to shift the dial.

And the euro sank back to the lows it hit last week

on France's political upheaval, with June business surveys for

the euro zone showing a sharper slowdown in activity there than

forecast.

The currency bloc's services industry showed signs of

weakening while a downturn in manufacturing took a turn for the

worse.

Back on Wall Street, equivalent S&P Global surveys for the

United States are due out later on Friday.

S&P500 futures were marginally in the red ahead of

the bell.

Elsewhere, China imposed countermeasures on Lockheed

Martin's ( LMT ) relevant entities and senior executives on

Friday over the United States' arms sales to Taiwan.

And Britain's financial technology firm Revolut could be

valued at north of $40 billion in a share sale, even as it still

awaits a UK banking licence, according to people familiar with

the situation.

Key developments that should provide more direction to U.S.

markets later on Friday:

* US Flash June business surveys from S&P Global, May existing

home sales; Canada April retail sales

* San Francisco President Federal Reserve President Mary Daly

speaks

* German Economy Minister Robert Habeck speaks in Beijing

* ECOFIN meeting of European Union finance ministers in

Luxembourg, with European Central Bank Vice President Luis de

Guindos attending

* US corporate earnings: Carmax, Factset

(By Mike Dolan, editing by Mark Heinrich

[email protected])