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Good morning. Technology led a decline in stocks ahead of the U.S. jobs report and there’s news of a potential Spanish banking merger. Here’s what’s moving markets.
U.S. stocks tumbled as the rotation away from super-charged technology shares picked up pace. The Nasdaq 100 lost more than 5%, its biggest fall since March, having gained in 11 of 13 sessions prior despite cries of stretched valuations. The rout was even more brutal in the options market. But while charts were redrawn and the wealth of the industry’s billionaires was slashed, tech shares remain sharply higher this year. European futures are flat to slightly lower.
A Valencia-Barcelona tie-up is on the cards as Bankia SA and CaixaBank explore a potential merger. The Spanish firms are examining an all-share combination, but no deal has been reached, according to CaixaBank, while Bankia characterized the move as a “regular study of potential strategic operations.” A potential agreement would mark one of the largest deals yet by corporations based in a country that’s been struck hard by Covid-19 outbreaks.
The alleged poisoning of Russian opposition leader Alexey Navalny could have implications for the energy industry. The head of the German parliament’s foreign affairs committee and the influential Bild newspaper say a new natural gas pipeline being built under the Baltic Sea from Russia directly to the German coast, known as Nord Stream 2, should be stopped following the incident. German Chancellor Angela Merkel is waiting for Russia’s response before deciding how to react.
It’s non-farm Friday. Today’s U.S. jobs report could deliver the last positive print before losses strike again, writes Eliza Winger of Bloomberg Economics, noting private-sector payrolls, as reported by ADP, showed a much weaker-than-expected pace of hiring last month. The latest statistics suggest companies continue to hire at a more moderate pace than immediately following the lifting of business lockdowns months ago. Here’s what to watch today.
U.S.-China relations remain on the radar, with President Xi Jinping setting a combative tone in latest remarks. Elsewhere, we’ll get a reading of the U.K. construction purchasing managers index as well as German factory orders after data Thursday showed the euro area’s recovery ran out of steam during the third quarter.