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European Markets Slide, Nasdaq Futures Drop 200 Points

European bourses decline, Stoxx 600 steps back from a record high set a day earlier. Futures on Wall Street sharply lower as sentiment dampens after a disappointing Amazon report.

SageFX - Jul, 30, 21

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Principal Points

  • European bourses decline, Stoxx 600 steps back from a record high set a day earlier
  • Futures on Wall Street sharply lower as sentiment dampens after a disappointing Amazon report

A softer tone has defined the start of equity trading in Europe on the last trading day of the month. Main indexes across the old continent are in the red while tech losses lead to the downside charge in stock futures trading on Wall Street. 

The pan-European Stoxx 600 opened with a drop of 0.75% and gyrated around the 460-mark. All major individual economies in the bloc are also in negative territory with the German DAX being the worst performer, down over 1.00%. UK’s FTSE on Friday is lower by more than 0.95%, while France’s CAC40 and Spain’s IBEX35 are lower by about 0.40%, and 0.80%, respectively. 

The early-morning losses in European stocks follow all-time highs from a day earlier as investors piled into equities amid strong earnings from commodity majors. Despite the current slump, the region-wide index is on track to log its sixth straight month of gains. 

Concerns about persistent inflation pressures and China’s regulatory crackdown are putting a drag on the sentiment on Friday on both sides of the Atlantic. 

Futures contracts tied to the major averages on Wall Street are showing steep losses at the opening bell in New York on Friday. Nasdaq futures are sharply lower by about 200 points or over 1.30%. Dow Jones futures dipped about 140 points ahead of July’s final trading session. S&P500 futures tumbled over 0.80%.

Weighing on the market mood, and the tech slide, in particular, is the latest report in this week’s deluge of earnings statements for the second quarter. Amazon delivered a rather disappointing corporate earnings report for the quarter ended June. The e-commerce giant said it earned $113.1bn, falling short of expected revenue of $115.4bn. Profit for the company landed at $7.8bn, exceeding analyst consensus. 

Equity trading on Wall Street finished Thursday’s session on a high note. The Dow Jones Industrial Average surged to an all-time intraday high but later retreated a bit to end positively by 0.44%. The S&P500 and the Nasdaq Composite gained 0.42%, and 0.11%, respectively. 

Shares climbed Thursday despite new data from the Commercial Department showed economic growth in the US decelerated in the second quarter. Gross domestic product for the latest quarter arrived at 6.5% on an annualized basis, missing expectations of 8.5%. 

Meanwhile, the resurgence of Covid in some states is posing a renewed threat that economic growth may stall during the second half of 2021. After months of receding coronavirus cases across the US, recent data shows confirmed infections are starting to rise again. 

Crypto Slowly Restart Positive Movement

In cryptocurrency, Ether today is outperforming the original cryptocurrency, Bitcoin. On Friday, the Ethereum token is showing a 4% gain, while bitcoin is hovering right above the flatline. Ether is in its third straight session of gains, while bitcoin yesterday broke a winning streak of eight consecutive days of price increases.

Bitcoin is poised to end July trading in positive territory. The current market price of $39,800 suggests a monthly gain of over $5,000, or 15%, as the market this month revived the optimistic mood on comments by Elon Musk, Jack Dorsey and a single job posting by Amazon which said the company was looking to hire a digital currency and blockchain expert.