Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Tech Sell-Off, Chinese PPI, Crypto's Colonial Jitters - What's Moving Markets

EconomyMay 11, 2021 18:58
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- The sell-off in technology stocks is set to continue, after weakness in Asia and Europe overnight. Equities are broadly weaker after signs of inflation emerging in China - but a bevy of Federal Reserve speakers has the opportunity to calm nerves ahead of tomorrow's CPI release in the U.S. Crypto assets have also sold off as the Colonial Pipeline cyberattack illustrates the central place of cryptocurrencies in a global ransomware business approaching systemic proportions. And OPEC and the American Petroleum Institute release regular updates on oil supplies. Here's what you need to know in financial markets on Tuesday, May 11th.

1. Tech sell-off set to continue

The sell-off in technology stocks looks set to continue when Wall Street opens later, with Nasdaq 100 futures already down by more than 1% in the premarket session.  

Other U.S. indices were outperforming but were also marked lower: Dow Jones futures were down 0.4% while S&P 500 futures were down 0.7%.

The rise in commodity prices and nascent fears of monetary tightening appear to have been the catalyst for the move that started on Monday, but a variety of other factors have also been at work, from rising regulatory risk to the awareness of sky-high valuations and the consequent rotation into value stocks.

China’s tech stocks held up reasonably well overnight, but the South Korean KOSPI fell 1.2%, with chipmakers prominent among the losers. Taiwan Semiconductor Manufacturing (NYSE:TSM) also fell 3.1% in Taiwan, while in Europe, chipmakers also led the STOXX Technology index to a 2.2% drop.  

2. China’s mixed inflation picture

Those looking for signs of inflation saw fresh evidence of it in China’s latest producer price data, which rose at the fastest annual rate in three and a half years in April. The PPI rose to 6.8% from 4.4% in March, driven largely by expectations of orders for domestic infrastructure investment.

China’s consumer inflation rate, however, rose by less than expected to 0.9%, despite signs that the global chip shortage is feeding through into higher prices for appliances. (Separately, Japan's Nissan warned overnight that it would struggle to turn a profit this year due to the chip issue).

Separately, China’s census data showed its population grew at the slowest rate in over 100 years in the decade through 2020.  The shrinkage of China’s working age population, and the growing number of pensioners it will have to support, may put significant upward pressure on wages in the long term, all other things being equal.

3. Crypto joins the sell-off; Musk tries to rally Doge fans

Crypto assets joined the sell-off, as the Colonial Pipeline ransomware attack revived fears that regulators may clamp down on the use of such currencies.

The hacker group DarkSide’s demand for payment in Bitcoin drew fresh attention to how the anonymity and untraceability offered by cryptocurrencies facilitate global crime.

By 6:30 AM ET, Bitcoin was down 4.7% at $55,625, while Ethereum was down 3.5% at $3,962. Dogecoin, however, put in a dead-cat bounce of 1.8% after Elon Musk attempted to undo the damage done by his Saturday Night Live appearance by canvassing Twitter on whether Tesla (NASDAQ:TSLA) should accept it.

Tesla has more pressing issues to worry about: Cathie Wood’s ARK Innovation Fund, one of its biggest backers, fell below its 200-day moving average on Monday, a move that may trigger more redemptions and forced selling of Tesla stock.  

4. JOLTS and Fed speakers

Four days after an alarmingly weak employment report, the Labor Department releases its JOLTS job openings survey for March at 10 AM ET (1400 GMT). Vacancies are set to rise to 7.50 million, closing in on the record high that they set in 2019..

The numbers will cast fresh light on the extent to which the shortfall in hiring in April was due to a mismatch of skills and openings in the labor force as business regains its freedom to operate. Economists argue that labor shortages could both hold back the pace of recovery and put upward pressure on wages faster than otherwise would be the case.

The rest of the day will be punctuated by speeches from Federal Reserve officials, who have the opportunity to talk down the rise in inflation in April that is expected to be announced on Wednesday. New York Fed President John Williams gets the ball rolling at 10:30 AM ET, with Lael Brainard, Raphael Bostic, Mary Daly and Patrick Harker all chipping in later.

5. Colonial sees pipeline largely back online by weekend  

Colonial Pipeline Company said it expects flows through its fuel pipelines to the East Coast to be substantially restored by the weekend, ensuring that the dislocation to the oil market from last week’s cyberattack on it remains relatively limited.

President Joe Biden said it’s likely Russia bears ‘some responsibility’ for the attack, given evidence suggesting that the hacker group DarkSide is based in eastern Europe. However, no evidence linking them to the Russian government has been presented, which limits the likelihood of retaliation that could hurt Russian financial markets.

The oil market can thus return to its more normal routine, which involves the publication of OPEC’s monthly report and the American Petroleum Institute’s weekly inventories estimates.

Tech Sell-Off, Chinese PPI, Crypto's Colonial Jitters - What's Moving Markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email