Breakfast briefing: Tech wobbles drives sudden, sharp flight to 'safety'
A sharp decline in major tech stocks like Meta, Google, and SpaceX has triggered a flight to the safety of government bonds. Economic data also shows tightening labor markets and rising cost pressures in the US and Canada.
Why it matters
Market volatility in the tech sector combined with inflationary pressures suggests potential instability in global financial markets.
Here's our summary of key economic events overnight that affect New Zealand, with news tech equity wobbles is driving a sudden, sharp flight to the relative short-term 'safety' of government bonds.
The Nasdaq is down -2.5% so far today with Meta down -7.2% (see below), SpaceX is down -8.5%, Google is down -9.6%, and many other FANGS are down about -4.4%.
But first in the US, there was a notable drop in initial jobless claims last week, more than accounted for by seasonal factors. It is hard to know whether this indicates a freer labour market or just much tighter qualification standards. Probably the latter, based on the weekly ADP data. There are now 1.48 mln people on this out-of-work support, the lowest level since late 2022 - and prior to that, the 1970s. The new qualification standards are very tough.
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