SINGAPORE (Reuters) – Chip shares dragged Asian indexes lower on Wednesday and European futures fell after growth concerns drove the steepest selloff in a month on Wall Street and investors wiped $279 billion from the worth of market darling chipmaker Nvidia.
Oil hit year-to-date lows in Asia trade, the safe-haven yen rose, Japanese stocks fell greater than 3% and the regional shares ex-Japan dropped nearly 2%. [MKTS/GLOB]
Listed here are analyst and investor comments on market moves:
NICK FERRES, CIO, VANTAGE POINT ASSET MANAGEMENT, SINGAPORE
“The ISM manufacturing index poured cold water on the benign growth outlook.
“Although equities have responded enthusiastically to the dovish rate outlook … a variety of key leading indicators suggest that macro conditions appear prone to deteriorate more sharply looking forward. In that context, the S&P 500 valuation multiple, equity and credit premium offer insufficient compensation for risk.
“We fear one other drawdown phase over the approaching weeks.”
JUN BEI LIU, PORTFOLIO MANAGER, TRIBECA, SYDNEY
“Individuals are taking a little bit of profit off.
“There’s nothing fundamentally flawed with the equity market. If anything, things are literally looking pretty good. You’ve 25 basis point cuts to begin and quite a number of to follow and the economy is slowing but not collapsing.
“The following few months will probably see the underside of earnings and for investors, in the following few months is where you deploy into a number of those opportunities.”
STEVEN LEUNG, EXECUTIVE DIRECTOR OF INSTITUTIONAL SALES, UOB KAY HIAN, HONG KONG
“Hong Kong is pretty weak, so at any time when we see a negative signal like that from the U.S., Hong Kong will probably be performing even worse.
“Individuals are pondering the present situation is different to the one in August, on account of the unwind of the yen carry trade. This time, it is not due to that, it’s more due to U.S. economy. It’s more scary, because it is not a technical reason, it is a more fundamental issue.”
JASON TEH, CIO, VERTIUM ASSET MANAGEMENT, SYDNEY
“The query is how briskly the economy slows down while the Fed cuts rates because in the event that they are behind the curve, then the markets will proceed to dump. It’s that tightrope immediately and the market is attempting to figure it out.
“While you take a look at Nvidia as a market leader, it is not holding up despite very strong profits. There’s an old saying – if the troops cannot follow the generals it is a warning sign … if the Nvidias and Apples and Microsofts cannot delay the market, that is it we’re in a bear market.”
MICHAEL ARONE, SPDR CHIEF STRATEGIST, STATE STREET GLOBAL ADVISORS, BOSTON
“What I expect is that we’ll see a continued rotation away from technology stocks leading the strategy to broader leadership. That’s happening because rates of interest and inflation are each falling and that ought to help to shut the gap in earnings growth between the technology sector and the remaining of the market.”
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA, NEW YORK
“I feel investors just succumbed to seasonality ahead of what they fear will probably be a double dose of declines in an election yr in each September and October, and so they piled on to those stocks that had a number of profits booked.
“This may increasingly be a brief week but it’s going to be a very important and crucial week one for investor confidence; persons are going to stay on edge.”
STEVE SOSNICK, MARKET STRATEGIST, INTERACTIVE BROKERS, GREENWICH, CT
“There’s a little bit of a post-Nvidia earnings hangover happening today. Those earnings last week were tremendous; they exceeded expectations. However the magnitude of the beats is shrinking quarter by quarter and that’s not lost on investors.
“There’s concern about what the job numbers are going to indicate, about seasonality. That’s why the VIX is higher. I don’t think the ISM number, showing a weaker manufacturing sector but higher prices, was in any respect helpful. And there you have got it. Gravity.”
MICHAEL GREEN, PORTFOLIO MANAGER, SIMPLIFY, SAN FRANCISCO BAY AREA
“Individuals are over-allocated to Nvidia and plenty of of those names and so they’re trying to scale back that exposure. It just has the potential for this stuff to dump quite significantly.”
(Reporting by Reuters bureaux in Latest York and Asia; Compiled by Tom Westbrook; Editing by Sonali Paul)