Wall Street steady ahead of Big Tech earnings

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US stocks notched small gains on Monday ahead of first-quarter results from the world’s biggest tech companies this week, while Asian markets sold off on the expectation of tight US restrictions on investments in China.

Wall Street’s benchmark S&P 500 rose 0.2 per cent, with basic materials and healthcare stocks the best-performing sectors. The tech-heavy Nasdaq Composite rose 0.1 per cent and shares in Bed Bath & Beyond were down 21 per cent after the home goods group filed for Chapter 11 bankruptcy protection on Sunday.

The latest earnings from Microsoft, Alphabet and Amazon are likely to be the focus of investors’ attention, however. Big Tech stocks have held up well even as US interest rates have continued to climb, propping up the wider market so far this year.

First Republic’s results after the New York close meanwhile are expected to shed light on how the bank fared after other lenders in March spent $30bn to stabilise its balance sheet during the banking crisis.

US government debt rallied on Monday, with the yield on interest rate-sensitive two-year Treasuries down 0.03 percentage points to 4.15 per cent and the yield on the benchmark 10-year note down 0.04 percentage points to 3.52 per cent. Yields move inversely to prices.

A measure of the dollar’s strength against a basket of six major currencies fell 0.2 per cent.

Asian equities continued to slide, with Hong Kong’s Hang Seng index down 0.6 per cent and the Hang Seng Tech index down 0.2 per cent, although it had traded as much as 1.1. per cent lower earlier in the session.

Markets expect US president Joe Biden to sign an executive order at next month’s G7 summit that will tighten rules on investments by US companies in key parts of China’s economy — measures that could reduce China’s GDP output by “around 2 percentage points” over the next four years, according to Goldman Sachs.

China’s CSI 300 fell 1.2 per cent, dragged lower by basic materials, property and consumer non-cyclicals.

China’s first-quarter GDP figures last week beat consensus expectations, with consumer spending rising as the service sector reopened, yet the overall numbers were “not particularly supportive of an industrial recovery”, said Robert Carnell, ING Asia-Pacific chief economist.

“Millions of Chinese heading out for hot pot is not going to have much of a positive impact on the shares of traded companies, especially in the manufacturing sector,” Carnell added. “There is also the rather perverse sense that a consensus-beating GDP means the chances of large dollops of fiscal or monetary stimulus are now very low.”

Europe’s region-wide Stoxx 600 added 0.1 per cent and London’s FTSE 100 was steady. The moves came as Credit Suisse announced it suffered SFr61.2bn ($68.6bn) of asset outflows in the first quarter. Shares in UBS, which agreed to take over Credit Suisse last month, rose 1.6 per cent.

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