ORLANDO, Florida, July 23 (Reuters) - European and U.S.

stocks slumped while bond yields shot higher on Thursday, with

global markets rocked by oil's surge above $100 a barrel and

earnings reports from two U.S. "Big Tech" companies that showed

they are burning through cash at an alarming rate.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. Alphabet's cash burn raises alarm for Big Tech as AI

spending climbs

2. Trump vows to punish Iran for Houthi attacks in Red Sea;

oil surges over $100

3. ECB keeps rates unchanged but September hike stays in

play

4. Warsh's no-guidance approach confronts a hawkish world

and hawkish Fed colleagues

5. U.S. Treasury bill issuance grows, heightens long-term

risk

Today's Key Market Moves

* STOCKS: South Korea +4%, Japan +0.5%. Europe -1.3%, UK

-0.7%. S&P 500 -1.2%, Nasdaq -2.2%.

* SECTORS/SHARES: "Mag 7" shares, consumer discretionaries

-5%, biggest falls since April last year. Industrials +1.8%.

Tesla -15%, T-Mobile -11%, Alphabet -7%, Amazon -5%. Lockheed

Martin +10%, Intel +12% after the bell.

* FX: Dollar/yen shoots up towards 164.00, a new 40-year

high. Euro 3-week low after ECB, South African rand world's

worst performer, -3%, after central bank keeps rates on hold.

* BONDS: 2-year JGB yield hits 1.50%, highest since 1995.

2-year German yield highest in two years. U.S. yields hit

highest in 18 months, 30-year U.S. real yield highest since

2008. Ugly 10-year TIPS auction - highest yield since 2008.

* COMMODITIES/METALS: Oil leaps 6-7%, now +40% y/y. Brent

tops $100, WTI over $90. Gold -2%.

Today's Talking Points

* Running hot

Relief from the June U.S. CPI and PPI inflation reports last

week has surely evaporated. Oil is soaring again as war in the

Middle East flares up - Brent is over $100 a barrel and WTI is

above $90 - and the latest weekly jobless claims figures suggest

the U.S. economy is humming along just fine (for now). Initial

claims fell to 187,000 last week, the lowest since the summer of

1969.

Little wonder Treasuries are tanking. Two- and 10-year U.S.

yields are the highest in 18 months, and the 30-year yield is

close to a new post-2007 high. The 30-year "real yield" is the

highest since 2008, nudging 3%. Rates traders are now pricing in

60 bps of Fed hikes by April. Wall Street, especially Big Tech

and big borrowers, doesn't like it one bit. Main Street won't

either - gas is above $4/gallon and 30-year mortgage rates are

the highest in a year. Both are rising too.

* No-flow zone

Alphabet and Tesla results after the bell on Wednesday

confirmed what analysts had been warning - and investors had

been doing their best to ignore - for a while: they're burning

cash. Alphabet's free cash flow in Q1 turned negative for the

first time since the company floated more than 20 years ago, and

Tesla's FCF turned negative for the first time in two years.

Once prized for fat margins and cash gushers that could

easily fund new bets, Big Tech is now relying on debt and share

sales to bankroll AI spending, which is set to top $700 billion

this year as their cash flows fall short. Microsoft, Meta

Platforms and Amazon report results next week - buckle up.

* No changing of Lagarde

The world's second-biggest central bank kept interest rates on

hold on Thursday, but is on track to raise them at its next

meeting in September. That is how markets interpreted

post-decision comments from European Central Bank President

Christine Lagarde, who noted that a move today was discussed and

the full extent of the second oil shock underway has yet to be

felt.

That's certainly true. Not only is oil on a tear, European

natural gas prices have exploded 60% in the last month, and on

Thursday hit their highest level since just after the U.S.-Iran

war started. Rates traders are pricing in a 70% chance the ECB

hikes again in September, and are anticipating around 75 bps of

tightening in total over the next year or so. Can sluggish euro

zone growth withstand that?

What could move markets tomorrow?

* PMIs for Japan, euro zone, UK, U.S. (July)

* Japan CPI inflation (June)

* UK retail sales (June)

* European Central Bank chief economist Philip Lane speaks

* U.S. earnings, including American Express, Verizon

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