Apple’s slide takes shine off global stock rally
New York — Global equity markets edged lower on Wednesday, pulled lower over concerns about the launch of Apple’s new iPhone X, while the dollar rose after a report showed US producer prices rebounded in August, suggesting a strong economy.
The yield on European and US government debt rose, with the benchmark 10-year US Treasury hitting a two-and-a-half week high.
Oil prices rose after the International Energy Agency (IEA) said a global surplus was starting to shrink, even though US data showed another big increase in crude inventories due to the ongoing impact from Hurricane Harvey on the Houston energy hub.
European equities pared earlier losses to edge higher thanks to gains in oil and banking stocks, which offset weak chipmakers and a fall in miners.
Chipmakers that supply Apple were among the worst performers, with AMS down 3.9% and Dialog Semiconductor off 1.6%. STMicro ended up 0.1%. Chipmakers have been the best performing among Europe’s tech stocks this year, accounting for a large chunk of the sector’s outperformance. AMS shares have gained 165% year-to-date.
MSCI’s all-country world stock index shed 0.19%, but the pan-European FTSEurofirst 300 index rose 0.10% and the Euro STOXX 50 rose 0.3%. On Wall Street, the Dow Jones Industrial Average rose 8.01 points, or 0.04%, to 22,126.87. The S&P 500 lost 1.17 points, or 0.05%, to 2,495.31 and the Nasdaq Composite dropped 6.77 points, or 0.1%, to 6,447.51.
The launch of Apple’s iPhone X will test whether inflation is going to be weak, said Mike Bell, global markets strategist with JP Morgan Asset Management in London.
Investors will need to gauge how strong demand will be for the iPhone X, as its price will start at $999, he said.
"If it’s relatively healthy I think it shows that there is still quite a lot of pricing power for US companies and consumers have confidence," Bell said.
The dollar index, which tracks the currency against a basket of six major rivals, was up 0.56% at 92.396.
The index rose after the US Labour Department said its producer price index for final demand increased 0.2% in August after slipping 0.1% in July. The rebound was driven by a surge in the cost of gasoline.
The euro fell 0.59% to $1.1894 while the Japanese yen weakened 0.39% versus the greenback at 110.61 per dollar.
Benchmark 10-year US Treasury notes fell 4/32 in price to yield 2.1848%. Their German counterpart, 10 year Bunds, fell 7 basis points in price to yield 0.403%. Oil prices jumped after the IEA report but then pared gains.
US crude rose 1.62% to $49.01 per barrel and Brent was last at $54.90, up 1.16% on the day.
"A sharp rebound in US oil production compared with last week has limited gains in crude prices as concerns grow that oil output is recovering faster than refining capacity coming online," said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.