Morning Bid: Nvidia gets vertigo, dollar builds


A look at the day ahead in U.S. and global markets from Mike Dolan

Nvidia, the Nasdaq and the S&P500 got dizzy at record highs on Thursday as world markets start to take stock of a bumper 2024 as we near the half-year point next week – but with the dollar back on the march regardless.

The latest U.S. economic readouts show some cooling of activity through May and June, but the trigger for the megacap recoil was less than clear – not least with the Atlanta Federal Reserve’s “GDPNow” real-time estimate still showing a brisk 3% growth for the quarter.

The scale of recent tech gains may just have been too fast as midyear accounting prompts a breather – and perhaps investors are now bracing for a bumpier second half into November’s U.S. election. Next Thursday’s presidential TV debate may sound the klaxon for that.

Either way, Nvidia’s 3.5% drop on the day meant it surrendered its brief role as the most valued company to Microsoft again, and the tech-heavy Nasdaq ended a seven-day streak of record closing highs.

The wider equity complex was more mixed, however, with the blue-chip Dow Jones gaining 0.7% and the small-cap Russell 2000 flat on the day.

Despite another softening of Treasury yields after misses on housing starts and jobless claims, the dollar continued to build a head of steam.

And greenback gains were pretty broad-based – against the European currencies where central bank rate cuts and easing bets are mounting, but also against Japan’s yen and China’s yuan in Asia.

With foreign money exiting China again – amid rising global trade tensions and little sign of an end to the deepening housing bust there, Chinese stocks and the yuan had another poor end to dour week.

Foreign portfolio flows have turned. About 33 billion yuan ($4.54 billion) left the mainland this month via the Northbound leg of the Stock Connect Scheme – following four months of net inflows.

With one eye on the Chinese Communist Party’s central committee plenum next month and G7 countries

Euro zone business growth slowed sharply this month as demand fell for the first time since February, a survey found, with the bloc’s services industry showing signs of weakening while the downturn in manufacturing took a turn for the worse.

Headline Japanese consumer price inflation jumped back less than forecast last month, with the gauge excluding energy and fresh food falling to just 2.1%.

UK retail rebounded sharply in May after a weather-beaten April.

Flash euro PMIS for June

French business climate

Key developments that should provide more direction to U.S. markets later on Friday:

* US Flash June business surveys from S&P Global, May existing home sales; Canada April retail sales

* San Francisco President Federal Reserve President Mary Daly speaks

* German Economy Minister Robert Habeck speaks in Beijing

* ECOFIN meeting of European Union finance ministers in Luxembourg, with European Central Bank Vice President Luis de Guindos attending

* US corporate earnings: Carmax, Factset

(By Mike Dolan, editing by XXXX

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