August 5, 2024 at 6:37 AM EDT
Good morning. Global stocks are falling with US futures in the red as a tech-led selloff accelerates. Meanwhile, concerns about the US economy are fueling speculation as to when the Federal Reserve will cut interest rates. And Mars is considering making a major deal in the snack industry. Here’s what traders are talking about. — Morwenna Coniam.
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Stocks slump
The global stock-market decline picked up speed on Monday, with losses cascading across tech shares and the Nasdaq 100 set for its biggest opening drop in more than four years. Japan’s equity benchmarks have slid more than 20% from record highs reached last month while European stocks are also falling. The yen surged 3%, while the Mexican peso’s slump extended.
Fed bets
Global bonds erased their losses for the year as concern the US economic outlook is rapidly worsening spurs demand for fixed-income assets. Meanwhile, traders ramped up bets that the Federal Reserve will step in with an emergency interest rate cut, putting the odds at 60% for a quarter-point reduction within one week. Treasuries posted small moves after a rally that sent the 10-year yield to the lowest in a year and a gauge of the dollar dipped.
Apple stake
Megacap technology stocks bore the brunt of the selloff, with chipmaker Nvidia falling over 7% and Apple down 8% in premarket trading.
Adding to pressure on tech, Berkshire Hathaway slashed its stake in Apple by almost 50% as part of a massive second-quarter selling spree. Analysts are urging Apple investors to remain calm, despite a delay in the company’s much-hyped AI rollout.
Rising tensions
Elsewhere, oil extended a slide from a seven-month low as the selloff in wider financial markets countered rising tensions in the Middle East. Israel is bracing itself for a possible attack from Iran and regional militias in retaliation for assassinations of Hezbollah and Hamas officials. Cryptocurrencies also reeled from risk aversion in global markets. Still, some are viewing the market situation as a healthy correction after a period of growth after a period of heady gains.
Mars mulling a deal
Aside from the global market selloff, a major consumer deal may be in the works. Confectioner Mars is considering buying snack-maker Kellanova, according to people familiar with the matter. An acquisition of Kellanova, which was spun off from Kellogg Co last year, would give Mars brands such as Pringles, Cheez-It and Pop-Tarts. Considerations are ongoing and no final decisions have been made, but with Kellanova valued at $21.6 billion, it could be one of the biggest deals in the industry this year.
Bankwatch 