Broadcom Jump Set to Extend Wall Street Tech Rally: Markets Wrap

(Bloomberg) — US equity futures pointed to a strong end to the week on Wall Street, as a premarket surge in Broadcom Inc. powered gains across the entire chip technology complex.

Contracts on the Nasdaq 100 climbed 0.7%, with shares in Broadcom Inc. jumping 15% after it predicted a boom in demand for its artificial intelligence chips. If premarket gains holds, the stock will hit a record high, inching closer to a $1 trillion market cap. Peers Marvell Technology Inc., Micron Technology Inc., Nvidia Corp. and Advanced Micro Devices Inc. also rose. 

Stock markets are also likely to benefit from an interest-rate cut next week, with the Federal Reserve more or less priced to deliver a quarter-point reduction. The S&P 500 has rallied 27% this year, and strategists polled by Bloomberg predict it will outpace European peers again in 2025. 

“You have a US economy which is doing well and an incoming administration that is very pro-corporate — all that is in the price, but it doesn’t mean the rally can’t extend,” said Timothy Graf, head of EMEA macro strategy at State Street Global Markets.

Europe’s Stoxx 600 index slipped 0.1% amid continued disappointment over the lack of concrete stimulus measures from China. Insurer Munich Re was a notable gainer after it forecast a net income boost next year.  

In currency markets, the pound weakened after Britain’s economy unexpectedly contracted for a second straight month in October. The euro strengthened after the European Central Bank sounded less dovish on rates than some expected after its policy announcement Thursday, forcing traders to pared policy-easing bets for next year. 

The dollar was steady against a basket of currencies, on track for a second straight week of gains.

Graf of State Street expects more gains for the dollar, noting that the Fed’s easing cycle could prove shallow relative to Europe, where economic growth is weaker. Swap markets aren’t pricing a cut from the Bank of England at next week’s meeting, despite Friday’s weak data. 

China Letdown

Earlier, Asian shares fell as a key economic meeting in China pledged to boost consumption but failed to offer details on fiscal stimulus. A gauge of world stocks is headed for the worst week in nearly a month. 

“The newsflow has been underwhelming,” Beata Manthey, head of European equity strategy at Citigroup Inc., said of announcements from China. “The markets want numbers. We didn’t get the numbers.” 

However, Chinese 10-year government bond yields slid below 1.8% for the first time in history, as authorities vowed to cut policy rates and banks’ reserve ratios.

Oil edged higher, with Brent crude up 3.5% this week on the prospect for tighter US sanctions against Iran and Russia. 

Key events this week:

• Eurozone industrial production, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.3% as of 6:52 a.m. New York time
• Nasdaq 100 futures rose 0.6%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The Stoxx Europe 600 was little changed
• The MSCI World Index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.0491
• The British pound fell 0.2% to $1.2649
• The Japanese yen fell 0.6% to 153.59 per dollar

Cryptocurrencies

• Bitcoin rose 0.6% to $100,349.51
• Ether rose 1% to $3,905.52

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.34%
• Germany’s 10-year yield advanced three basis points to 2.24%
• Britain’s 10-year yield advanced one basis point to 4.38%

Commodities

• West Texas Intermediate crude rose 0.9% to $70.66 a barrel
• Spot gold fell 0.6% to $2,665.44 an ounce

This story was produced with the assistance of Bloomberg Automation.

 

–With assistance from Michael Msika and Sagarika Jaisinghani.

©2024 Bloomberg L.P.