Stock markets: Tech collides with reality.


A Tesla Inc. in Beijing, China. Store Wednesday, May 31, 2023.

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This report is from today’s CNBC Daily Open, the new Global Markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Did you see it? You can register over here.

Technology sales
Major U.S. indexes fell on Monday, dragged down by a selloff in technology stocks. Stock futures, however, inched higher. European markets were trading mixed. The Pan-European Stoxx 600 fell 0.1%, continuing a five-day streak of losses last week, while S&P Global Ratings doubled its 2023 GDP forecast for the Eurozone from 0.3% to 0.6%.

Leaders speak
Russian President Vladimir Putin, in his first televised address since the Wagner Group’s march to Moscow, called on the organizers of the armed forces to “bring to justice” and said his troops would crush the uprising. Separately, US President Joe Biden said the US had “nothing to do with this.” [the events]This was part of the struggle within the Russian system.

‘Collateral offense’
The UK is facing a “mortgage catastrophe”, the country’s shadow finance minister has warned. Last week, the Bank of England raised mortgage rates by 50 basis points. This will bring the number of households without savings to 7.8 million by the end of the year, or 30% of households nationwide, according to the National Institute for Economic and Social Research, an independent think tank.

Apple’s new shoots
Apple’s new Vision Pro headphones aside, the tech company is reportedly planning to refresh all of its flagship products over the next 12 months. The second version of the Apple Watch Ultra to be released, a new 30-inch iMac (which will be the company’s largest all-in-one desktop to date), iPad Pros with OLED screens, MacBook Pros are equipped with Apple’s new. M3 chip, among other products.

[PRO] A recent fall in the S&P?
Miles Wilson, Morgan Stanley’s chief U.S. equity strategist, thinks there are “risks for a major correction.” [in the stock market] It’s not much higher because of four factors weighing on markets. Wilson, who predicted a market crash last year, thinks the S&P 500 will drop to 3,900 in the fourth quarter. That’s about 10%. Among the most bullish views on Wall Street, down from Monday’s close.

The attempted coup in Russia over the weekend dominated the headlines, but it didn’t seem to dominate investors’ minds. Instead, “macro factors will continue to be the main drivers of risk assets,” Barclays global research chairman Ajay Rajadyaksha wrote in a Monday note.

Indeed, tech stocks have fallen across the board as investors’ enthusiasm for artificial intelligence has faded and been replaced by a clear-eyed view of today’s economy.

Alphabet fell 3.27% after UBS downgraded the company, citing strong competition in the AI ​​sector. Nvidia and Meta fell miserably, losing more than 3% each. But Tesla’s 6.06% decline wasn’t all bad after Goldman Sachs downgraded the electric car maker to a “difficult pricing environment for new vehicles.”

The sell-off in tech weighed on the Nasdaq Composite, which fell 1.16%. The S&P 500 fell 0.45%, while the Dow Jones Industrial Average fell 0.04%.

Additional pain may occur. According to German bank Bernberg, the tech rally is “running out of steam. Tech, as a forward-looking sector, needs low interest rates if it wants to keep growing.

But while the Federal Reserve insists it will raise rates for now, lower rates “signal a deeper recession,” wrote Jonathan Stubbs, equity strategist at Bernberg. Stubbs mentions that such a situation would be “disadvantageous to technology”, but in reality no one would benefit from it.

However, with just days to go in June, the three major indexes are poised to end the second quarter higher. A recession seems to be months away – just like it was last year. Fingers crossed we manage to elude him until he tires to catch up with us.


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