US Futures Slide on Amazon, China Drop Saps Asia: Markets Wrap

(Bloomberg) — US stock futures fell and Asian stocks fell Friday as traders weighed in on signs of a future slowdown for megacap tech companies and the risks posed by Chinese regulators’ crackdown. Treasuries and the dollar rose.

Shares fell in Hong Kong and China, as well as Japan. Nasdaq 100 contracts lost more than 1% when Amazon.com Inc. in expanded trade slumped on indications that the rapid growth due to the pandemic is slowing. Shares in Asia-Pacific rose Thursday after Beijing tried to allay fears over regulatory restrictions on private industries, but US-listed Chinese stocks later fell again.

S&P 500 futures also fell. The benchmark rose overnight in data signaling for the Federal Reserve to keep policy ultra-loose. US economic growth was solid, but lagged behind estimates. The number of applications for unemployment fell, but was higher than expected.

The dollar experienced a four-day retreat, but is on track for its biggest weekly decline since May. Oil mainly made recent gains on expectations that economic reopening demand will weather the delta strain Covid-19 flare-ups.

Equities ended a volatile week amid Beijing’s pullback on private companies, which led to defeats in Hong Kong and China and briefly sparked broader risk aversion. The Fed’s expansive monetary policy continues to support broad market sentiment after Chairman Jerome Powell indicated that it would only gradually move towards tapering stimulus if the US makes sufficient economic progress.

“Investors should be aware of policy implementation and policy direction” in China, Catherine Yeung, investment director of Fidelity International, told Bloomberg Television. “We expect further volatility not only because of the regulatory issues or changing regulations that could arise, but we have earnings season in August, we still have the global risks as well.”

Amazon’s second-quarter sales and revenue forecast missed estimates, fueling debate over whether the pandemic-related outperformance of technology stocks will give way to a rebound in cyclical trading linked to economic recovery from the health crisis.

Elsewhere, Robinhood Markets Inc. its first day as a public company at 8.4% below its initial public offering price, after failing to convince some of the very small investors it seeks for long-term growth. Bitcoin continued to trade around $40,000 and maintained its recent uptick.

Read our MLIV blog for more market analysis.

Here are the main moves in the markets:

Shares

S&P 500 futures fell 0.8% as of 12:30 p.m. in Tokyo. The S&P 500 index rose 0.4%. Nasdaq 100 futures fell 1.3%. The Nasdaq 100 rose 0.2% The Japanese Topix index fell 1% The Australian S&P/ASX 200 index fell 0.2% The Kospi in South Korea fell 1.1% Hong Kong’s Hang Seng index fell 1, 8%China’s Shanghai Composite Index lost 0.5%Euro Stoxx 50 futures fell 0.7%

currencies

The Bloomberg Dollar Spot Index added 0.1% The euro was at $1.1880 The Japanese yen was at 109.53 per dollar The offshore yuan was at 6.4578 per dollar

bonds

10-year government bond yields fell two basis points to 1.25% Australian 10-year bond yields rose three basis points to 1.19%

Raw materials

West Texas Intermediate Crude Oil was $73.18 a barrel, down 0.6% Gold was $1,829.12 an ounce, up 0.1%

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