Equities: AI earnings revive risk appetite after tech weakness - Deutsche Bank
Deutsche Bank strategists note that United States (US) equities had a mixed session as Magnificent 7 weakness weighed on the S&P 500, even as the equal-weighted index reached a fresh record. Strong earnings and guidance from CoreWeave and Super Micro Computer subsequently improved sentiment, lifting US equity futures and supporting a broader rise across Asian markets.
AI results improve sentiment after mega-cap weakness
"Ahead of that, yesterday was a pretty mixed session for equities, with the S&P 500 down -0.32% amidst weakness from the Magnificent 7 (-0.90%). However, we’ve since had some more positive tech news after the US close, with results from CoreWeave and Super Micro Computer."
"Before those earnings however, there was a more subdued performance, with no huge moves on either side of the Atlantic. As mentioned, the main underperformer was the Magnificent 7 (-0.90%) which dragged on the S&P 500 (-0.32%). But otherwise, the rest of the index put in a steady performance, and the equal-weighted S&P 500 (+0.21%) hit another record high."
"CoreWeave shares surged by about +15% in extended trading after the AI cloud computing specialist reported a stronger sales outlook and a smaller-than-expected net loss. Meanwhile, SMC rose by more than +7% after-hours as its sales guidance for Q3 came in well ahead of estimates. So that’s boosted investor sentiment this morning, with S&P 500 futures up +0.10%, and NASDAQ 100 futures up +0.21%."
"There was also some optimism in Europe, where the STOXX 600 (+0.01%) just about posted a 7th consecutive gain for the first time in over a year, inching up to a new record. That included records for the DAX (+0.26%) and the IBEX 35 (+0.20%) as well, but the FTSE 100 (-0.17%) and the CAC 40 (-0.13%) both fell back."
"That trend has been clear in Asia overnight as well, where most of the major indices have moved higher this morning. That includes the KOSPI (+3.79%), which at current levels would be its strongest daily performance so far in August. Moreover, the Nikkei (+0.67%), the CSI 300 (+0.65%) and the Shanghai Comp (+0.32%) have all moved higher as well, although the Hang Seng (-1.17%) has lost ground."
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