ORLANDO, Florida, June 8 (Reuters) - The S&P 500 and Nasdaq
rebounded on Monday from Friday's tech-led rout, on news of
anIsrael-Iran detente and as investors bought back cheapened
stocks. The recovery was fairly muted though, suggesting worries
over interest rates and AI exuberance remain.
In my column today, I look at whether the adage that
"economic expansions don't die of old age, they're murdered by
the Fed" will apply to the AI-driven equity bull market.
Friday's selloff on the back of strong U.S. jobs data suggests
it might.
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. Iran and Israel say they have halted strikes on each
other for now
2. How a few AI chip giants warped Asia's stock picking game
3. Nvidia clinches deals with South Korean giants including
SK Group to advance AI boom
4. Oil market calm masks a host of unknowns: Bousso
5. Japan's economy cools on weak capex in Q1, revised data
shows
Today's Key Market Moves
* STOCKS: South Korea -9%, Japan -4%, China -3%. Europe, UK
little changed. S&P 500 +0.3%, Nasdaq +0.9%, Dow -0.2%.
* SECTORS/SHARES: "SOX" chip index +6%. Only three of 11
sectors on S&P 500 rise: tech, energy, consumer discretionaries.
Intel +11%, Micron Technology +10%, Apple -2%.
* FX: Dollar dips slightly, USD/JPY holds above 160.00. KRW
soars 2%, biggest EM climber; CLP down more than 1%, biggest EM
decliner
* BONDS: JGB yields +5 bps; U.S. yields +4 bps at long end,
curve bear steepens.
* COMMODITIES/METALS: Oil up ~1%.
Today's Talking Points
* Lacking luster
After Friday's selloff, a bounce on Wall Street on Monday
was always likely. We got one, but it was pretty patchy, at
least at a headline index level - the S&P 500 rose 0.3% after
falling 2.6%, the Nasdaq rose 0.9% after sliding 4%, and the Dow
slipped further after losing 1.3% on Friday. Only three of the
11 sectors in the S&P 500 rose.
This is all the more surprising given the Iran-Israel truce
hopes. On the other hand, investors have had plenty of Middle
East false dawns recently, and there was no pullback in bond
yields to seize upon - longer-dated Treasuries actually rose on
Monday.
* SpaceX in the City
This is the week. SpaceX lists on Friday, aiming to raise
$75 billion, which will be the most ever for an IPO and value
the company at an eye-watering $1.75 trillion. The mania is
palpable, but there are good reasons for caution too.
SpaceX is changing who gets access to shares; it's allowing
an early exit for insiders; Elon Musk is not giving up control
and can only be fired as CEO if he agrees to it; and it is still
a loss-making business. Investors don't seem to care about any
of that right now though - demand is strong. Very strong.
* In Europe's defense
Germany and France are scrapping a landmark project to
develop and build a new-generation fighter jet, according to
German sources, bowing to industrial rivalries over Europe's
most ambitious defense program.
The decision to end the core pillar of Europe's largest
defense project comes at a time when growing threats from Russia
and the U.S. are piling pressure on Europe to re-arm itself.
Monday's development signals countries may be pursuing this on
an increasingly unilateral basis.
What could move markets tomorrow?
* Developments in the Middle East
* Australia consumer sentiment (June)
* Taiwan trade (May)
* South Korea GDP (Q1, revised)
* Germany trade (April)
* Germany industrial production (April)
* Mexico inflation (May)
* Canada trade (April)
* U.S. trade (April)
* U.S. Treasury sells $58 billion of 3-year notes at auction
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