Equities: Mixed recovery after US selloff – Deutsche Bank

Deutsche Bank strategists note that United States (US) equities fell sharply as earlier gains in fixed income reversed, with losses across the S&P 500, Nasdaq and Magnificent Seven. Weak Walmart earnings and slower US sales growth added to concerns about consumer resilience. Overnight sentiment improved modestly, with US equity futures edging higher while Asian markets traded mixed, led by gains in Korea, Hong Kong and mainland China.

US and Asian stock performance mixed

"Equities struggled yesterday in response to the unwinding of fixed income gains, with the S&P 500 (-0.87%) posting its biggest decline of August so far. The Nasdaq (-1.00%) and the Mag-7 (-1.11%) saw larger losses, even as the Philly Semiconductor index (+0.53%) reversed some of its losses from earlier this week."

"Sentiment also wasn’t helped by earnings from Walmart (-9.15%), whose shares slumped after the company saw its slowest US sales growth since 2020 at +2.6% yoy. So that renewed questions about the health of the US consumer amid the backdrop of high energy prices, rising interest rates and a low saving rate."

"In the equity space, Europe’s Stoxx 600 (-0.12%), DAX (-0.42%) and CAC 40 (-0.57%) declined, whilst the FTSE 100 (+0.04%) inched up."

"The equity mood has improved a bit overnight, with both the S&P 500 (+0.06%) and NASDAQ (+0.20%) edging higher, while Asian markets are mixed. The Nikkei (-0.30%) is underperforming, but the Hang Seng (+0.72%) and CSI 300 (+0.52%) are advancing."

"Korea’s KOSPI is also up +0.89% following on a +5.89% surge yesterday. That’s been helped by a +2.10% gain for Samsung Electronics as Bloomberg reported that the company plans to announce a new package of dividends and buyback of up to 110trn won ($79bn)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)