The world’s broadest equity gauge – the MSCI all-country index – was on course to finish November with its 13th straight monthly gain – the longest such winning streak in the index’s 30-year history.
Though the celebrations were muffled slightly by the tech problems – China stocks had also taken another tumble in Asian trading, the mood seemed to be improving again in Europe. [.EU]
Germany’s Dax .GDAX and France’s CAC 40 .FCHI both inched up for a third day, though London’s FTSE .FTSE was back in the red as hopes of a breakthrough in Brexit negotiations pushed the pound higher again.
“I‘m not sure one would say it’s a bubble (in tech stocks),” said Andrew Milligan, head of investment strategy at Standard Life. “By and large the companies are generating either good profits or the potential for good profit growth”.
But “Tech is a sector unto itself… it’s utterly a view about barriers to entry.”
Possibly weighing on tech were concerns, sparked by a Morgan Stanley report earlier this week, that the “super-cycle” in memory chip demand looks likely to peak soon.
Shares of Amazon.com (AMZN.O), Apple (AAPL.O), Google parent Alphabet (GOOGL.O) and Facebook (FB.O) fell between 2 percent and 4 percent. Among the year’s other high fliers, Netflix (NFLX.O) slid 5.5 percent while Asia’s bellwether Samsung (005930.KS) slumped 4.3 percent to two-month lows.
The Nasdaq index is still up 26.8 percent so far this year, roughly 7 percentage points above gains in the MSCI world. tmsnrt.rs/2zJqD6m
“It is true that if you look at the world’s semiconductor sales on chart, their year-on-year growth appears to be peaking out,” said Hiroshi Watanabe, an economist at Sony Financial Holdings.
“But if you look at what’s driving demand, it’s not just smart phones and actually a lot of things.”
The tech nerves were not just confined to stocks. Rocketing cryptocurrency Bitcoin BTC=BTSP dropped a cool $1,000 to a low of $9,250 before clawing back nearly 3 percent in Asia and Europe to around $10,100.
In the more mainstream FX markets, the U.S. dollar climbed against the yen JPY= but dipped against the euro EUR and the pound GBP=. Measured against major peers it is headed for biggest monthly drop since July. [FRX]
Investors also seem to have grown cautious about the outlook of the world’s biggest economy and there are growing signs that it certainly won’t be the only country raising interest rates.
J.P. Morgan Asset Management global head of rates David Tan predicted on Thursday that there will be some 1,000 rate hikes globally over the next decade.
Borrowing costs in Germany, the euro zone’s benchmark bond issuer, rose to their highest in just over two weeks. The 10-year U.S. Treasuries yield climbed too, reaching 2.389 percent US10YT=RR to near this month’s high of 2.414 percent, Reuters reports.
