Some of the world’s hottest trades are faltering, and Airbus has fallen sharply after issuing a profit warning. Monday’s tech-led declines on Wall Street reverberated through global markets, pushing down European shares. The losses were led by Nvidia’s three-day, $430 billion selloff. The stock has fallen 13% since briefly overtaking Microsoft last week as the world’s most valuable company. The rapid decline has investors turning to technical analysis for clues on where the bottom may be.
Movements in Nvidia and Bitcoin are reminding investors that the market’s hottest trades are far from one-way bets. The largest digital asset posted one of its steepest drops on Monday since the onset of the crypto-market recovery at the start of last year, leaving investors pining for $60,000 as a technical floor for the token to avert more pain. “People are working out now that momentum works both ways,” said Chris Weston, head of research for Pepperstone Group.
In Europe, Airbus caught the headlines, tumbling more than 10% after issuing a profit warning amid persistent supply-chain concerns. The firm is coming up short on the millions of parts that make up commercial aircraft, and the situation is getting worse rather than better for the world’s largest planemaker. Its suppliers also fell on Tuesday, while Boeing, which has similar supply-chain problems, may be in focus in US hours.
Federal Reserve Bank of San Francisco President Mary Daly yesterday warned that the US labor market is nearing an inflection point, where further slowing could mean higher unemployment. We’ll hear more from Fed officials today, with Michelle Bowman and Lisa Cook scheduled to make remarks. Meanwhile, the US Treasury kicks off this week’s trio of bond sales later in the day with two-year notes, whose appeal is set to be boosted by incoming inflation numbers.
With the first round of the French election looming this week, Allianz Global Investors’ multi-asset chief investment officer is warning officials they must reassure foreign investors that the nation’s finances are in order or risk a fresh blowout in bond spreads. With polls showing Marine Le Pen’s far-right National Rally widening its lead, some fear the current political turmoil could trigger a European debt crisis to rival the one seen over a decade ago, Gregor Hirt said.
These developments highlight the volatility and interconnected nature of global markets, emphasizing the need for investors to stay informed and agile in their strategies.