Broadcom’s miss also speaks to the rising competition in the sector, where shares of chip designers like Marvell Technology have zoomed higher over the past week. Marvell’s shares touched a record high after Nvidia CEO Jensen Huang on Tuesday stated it is likely to become a trillion-dollar company.
Meantime, the broader economy has shown few signs of slowing, fuelling hawkish bets on the Federal Reserve's next move, with futures now seeing almost a 50% chance of a rate rise as soon as October.
The Fed's so-called Beige Book, which lays out the economic conditions facing policymakers when they meet this month, showed activity has picked up even as energy price pressures have become pervasive.
That was clear in the recently released ISM business surveys for May, as well as labor market numbers like May’s forecast-beating 122,000 rise in ADP private sector payrolls.
The May employment report will be released tomorrow, but overall U.S. economic surprise indexes are running at their most positive in three years.
There's been little relief on the energy front, meantime, with oil prices still elevated as we enter a crunch month for global crude supplies. And despite reports of a ceasefire between Israel and Lebanon boosting hopes for a broader Iran deal, fighting continued in southern Lebanon on Thursday.
In otherwise calm currency markets, the softening Japanese yen continued to flirt with the 160-per-dollar level, even in the face of warnings from BOJ sources that an interest rate rise is likely this month - unless a sharp escalation in the Middle East conflict upends markets.
And while investors await a wave of mega IPOs this summer, there have been renewed jitters in private equity and credit markets. Swiss asset manager Partners Group is facing heavy redemption requests from some of its funds and will cap withdrawals from its $16 billion U.S.-based fund after they exceeded the 5% quarterly limit.
Moving into Thursday's open, U.S. stock index futures were in the red while oil prices and Treasury yields slipped back slightly from Wednesday’s highs. And with regular tech stocks now recording extraordinary short-term moves that once seemed the preserve of frothier crypto markets, bitcoin seems almost forgotten. It's shed almost 20% since mid-May and fell to its lowest level since February on Wednesday.
With that, onto today's column.
