Market Wrap: The Rotation Continues; Capital Is Flowing Out of Tech Companies!

Major European indices are opening higher today despite weakness on Wall Street—Euro Stoxx 50 futures are stable, while the German DAX is up 0.46%, as are the EU50 (+0.29%), UK100 (+0.45%), and the Italian ITA40 index (+0.94%).

The main factor driving the markets today is the U.S. June payrolls report—the median forecast is for an increase of 110,000 jobs with an unemployment rate of 4.3%, but the wide range of estimates (25,000–200,000) poses a high risk of a surprise that will determine whether the Fed will raise rates further later this year.

The sell-off in the tech sector is putting additional pressure on market sentiment—following news that Meta plans to sell excess AI computing power, the SOX semiconductor index fell by more than 6% on Wednesday, and stock markets in South Korea and Japan saw sharp declines.

The yen suddenly strengthened, and the dollar/yen exchange rate fell to around 161, following reports that Japan was shifting its currency intervention strategy to a more “surgical” approach against speculators betting on the yen’s weakness, which further weakened the dollar across the broader market.

Oil prices fall for the third day in a row—Brent hits a four-month low, while WTI prices drop 0.72–0.86% following progress in U.S.-Iran talks in Doha regarding the Strait of Hormuz, which eases inflation concerns.

The U.S. dollar is slightly weaker (-0.38%), while gold is up 0.78% and silver is up 1.29%, benefiting from the greenback's weakness.

On the European stock market, defensive and cyclical sectors are performing the best—Health Care (+1.98%), Financials (+1.22%), and Consumer Discretionary (+1.09%). Technology (-2.80%) and Communications (-0.75%) are underperforming, dragging the Euro Stoxx 50 index down despite the strong performance of other sectors. Source: XTB

Corporate Information

• Bayer is up more than 5% (its highest level in nearly three years) following the creation of a new unit, Ruveon, for its Roundup business in the U.S., a move the market is interpreting as a step toward a potential breakup of the group, further bolstered by Deutsche Bank’s upgrade to “buy” and a 33% increase in its price target to €60.

• Sodexo’s stock is posting solid gains after the company raised its full-year organic revenue growth forecast to 1.2–1.5% following better-than-consensus third-quarter results (€6.17 billion versus a consensus estimate of €6.04 billion).

• Volkswagen is posting profits despite internal tensions—the company is preparing for a crucial supervisory board meeting on July 9, at which a decision is expected to be made to cut up to 100,000 jobs and close four German factories, a move that is facing strong opposition from labor unions and the state of Lower Saxony.

• Chipmakers remain under pressure from the declines seen in the previous quarter—Infineon Technologies is down 3.20% and ASML Holding is down 3.14%, amid a sell-off in semiconductors in the U.S. and Asia.

• The Swiss National Bank (SNB) has determined that UBS already meets the stricter capital requirements introduced following the collapse of Credit Suisse, while UBS itself argues that the new regulations are overly restrictive and could undermine the competitiveness of the Swiss financial sector.