Global shares subdued after US tech earnings disappoint
By Naomi Rovnick and Stella Qiu
LONDON, SYDNEY (Reuters) -Global stocks were subdued on Friday after earnings reports from Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX) failed to dazzle and ahead of an action-packed week for central bank interest rate decisions.
The MSCI World index of global shares, which has risen more than 16% this year, held steady while Europe's STOXX 600 was flat.
Tech stocks dropped in Europe and Asia, however, following steep post-earnings plunges in Tesla and Netflix earlier in the week
Shares in Taiwan's TSMC. the world's largest chipmaker, fell 3.3% on Friday after it warned of a drop in 2023 sales and announced its first fall in quarterly profits since 2019. A sub-index of European technology shares lost 1.6%.
On Thursday, the Nasdaq fell 2%, its biggest one-day loss since March. Investors took profits amid concerns about tech stock valuations, which have been supported by exuberance about the potential of artificial intelligence that has helped the Nasdaq gain about 40% year-to-date.
«The market got very over-bought,» said Patrick Spencer, vice chair of equities at Baird. «If you haven't played this market, you've missed out.»
A special rebalancing of the multi-trillion dollar Nasdaq 100 due at the close of trading on Friday, would also cause some «quirky price action» in tech mega-caps, Spencer said.
The overhaul of the index — designed to reduce its heavy weightings of tech giants like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) — may exacerbate moves in these stocks during the ongoing earnings season, Spencer added. But he also predicted that ever-optimistic tech investors would use sustained price weakness as a «chance to reload.»
YEN ON THE RUN
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