Big Tech names tagged as ‘gatekeepers’ under strict EU rules
Tech giants Amazon, Apple, Alphabet, Meta, and Microsoft have been designated as “gatekeepers” under the European Commission’s new Digital Markets Act. The term refers to big internet platforms that the EU sees as restricting access to services such as search and messaging.
The European Commission aims to impose stricter regulations on these companies to ensure fair competition and protect consumers. By designating them as gatekeepers, the EU wants to address concerns about their influence and control over the digital market.
Shares of all five companies were down slightly in pre-market trading. This indicates that investors may have concerns about the potential impact of the new regulations on these tech giants’ business models.
Problems remain with growth trade, RBC warns
RBC Capital Markets has issued a warning about potential problems facing the growth trade in the market. Despite a late-summer rebound in AI, RBC highlighted that growth valuations remain high compared to value stocks. This indicates that the growth trade may be over-owned, with positioning starting to stall.
Lori Calvasina, head of U.S. strategy at RBC, stated in a note that the rate of upward EPS revisions continues to favor growth stocks but the gap between growth and value is narrowing. This suggests that growth stocks’ dominance on the earnings front may be fading.
Investors should pay attention to these challenges in the growth trade and adjust their portfolios accordingly.
Evergrande shares spike more than 54%, top gainer on the Hang Seng
Shares of Chinese property developer Evergrande experienced a significant surge of more than 54% on Wednesday, making it the top gainer on the Hang Seng Index. This spike in Evergrande’s shares led gains in the real estate sector on the HSI, although overall, the index remained in negative territory due to declines in healthcare and industrial stocks.
This surge in Evergrande’s shares followed another Chinese real estate giant, Country Garden, making bond coupon payments and avoiding a default. The positive news surrounding the real estate sector in China also boosted shares of other companies such as Country Garden Holdings and Logan Group.
Japan will not ‘rule out any options’ as yen weakens over 147 against greenback
Japan’s vice minister of finance for international affairs, Masato Kanda, has warned that the country will not rule out any options if speculative moves against the yen persist. This statement came after the yen reached a 10-month low against the US dollar, sliding past 147.
Kanda stressed the importance of currency moves reflecting fundamentals, and Japan’s stance indicates its readiness to take action to stabilize the yen if necessary.
Australia’s economy grows 2.1% year on year in the second quarter
Australia’s gross domestic product (GDP) expanded by 2.1% in the second quarter compared to the same period last year, surpassing economists’ expectations of 1.8%. However, the figure was slightly lower than the 2.3% year-on-year growth recorded in the first quarter.
The primary contributors to Australia’s GDP growth in the second quarter were exports and investment, partially offset by changes in inventories. This marks the seventh consecutive quarterly rise in GDP on a quarter-on-quarter basis.
The positive growth in Australia’s economy indicates a continued recovery, but challenges and uncertainties remain.
Russell 2000 and Dow Transports posted worst day Tuesday since late April
The Russell 2000 index of small-cap stocks and the Dow Jones Transportation Average both experienced their worst days since late April on Tuesday. The Russell 2000 slid 2.1%, its largest one-day decline since April 25, while the Dow Transports dropped 2.19%, its worst day since April 26.
These declines suggest potential weakness in small-cap stocks and transportation-related companies, which could indicate broader market concerns.
See the stocks making the biggest moves after hours
Several stocks have experienced significant movements after the bell. Zscaler, a cloud security stock, slipped 1% despite a better-than-expected report for its fiscal fourth quarter. GitLab, a technology platform, jumped 4% following a strong second-quarter report. Gogo, a broadband stock, advanced 3.5% after announcing the approval of a share repurchase program.
Investors should closely monitor these stocks and consider their after-hours performance in their investment strategies.
S&P 500 and Dow futures are little changed
Futures tied to the S&P 500 and Dow Jones Industrial Average showed little change shortly after 6 p.m. ET. However, Nasdaq 100 futures slipped 0.1%, indicating potential divergence in market performance.
This lack of significant movement in futures suggests a relatively stable market outlook, with investors closely monitoring ongoing developments and potential catalysts for market volatility.
Overall, these recent developments in the tech industry, global markets, and economic indicators highlight the dynamic nature of the financial landscape, requiring investors to stay informed and adaptable in their investment strategies.