What you need to know…

The S&P 500 Index ($SPX) (SPY) on Thursday closed down -2.99%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -2.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -3.41%.

U.S. stock indexes Thursday sold off sharply, with the Nasdaq 100 falling to a 14-month low.  Soaring T-note yields Thursday sent technology stocks plunging and weighed on the overall market after the 10-year T-note yield climbed to a 3-1/2 year high of 3.106%. 

Weak economic data Thursday from Europe and China signal a slowdown in global growth that is bearish for stocks after German Mar factory orders posted their biggest decline in 5 months, and a gauge of China’s Apr services activity contracted at the fastest pace since the pandemic began. Weaker than expected U.S. economic data Thursday on weekly jobless claims and Q1 nonfarm productivity also weighed on stocks.

U.S. weekly initial unemployment claims unexpectedly rose +19,000 to 200,000, showing a weaker labor market than expectations of no change at 180,000.

U.S. Q1 nonfarm productivity fell -7.5% (q/q annualized), weaker than expectations of -5.3% and the steepest decline since 1947.  Q1 unit labor costs rose +11.6% (q/q annualized), stronger than expectations of +10.0%.

The BOE Thursday raised its key rate by 25 bp to 1.00% and warned the UK risks recession alongside double-digit inflation. 

Today’s stock movers…

A surge in the 10-year T-note yield to a 3-1/2 year high Thursday sent technology stocks tumbling.  Tesla (TSLA), Intuit (INTU), and Align Technology (ALGN) closed down by more than -8%.  Also, Amazon.com (AMZN), Netflix (NFLX), and Nvidia (NVDA) closed down by more than -7%.  Finally, Apple (AAPL), Advanced Micro Devices (AMD), Adobe (ADBE), Illumina (ILMN), and Qualcomm (QCOM) closed down by more than -5%. 

Etsy (ETSY) closed down more than -16% Thursday to lead losers in the S&P 500 after forecasting Q2 revenue of $540 million-$590 million, well below the consensus of $628.8 million.

Cognizant (CTSH) closed down more than -12% Thursday to lead losers in the Nasdaq 100 after cutting its full-year adjusted EPS outlook to $4.45-$4.55 from a prior view of $4.46-$4.60, weaker than the consensus of $4.55.

eBay (EBAY) closed down more than -11% Thursday after lowering guidance on full-year adjusted EPS from continuing operations to $3.90-$4.10 from a prior view of $4.20-$4.40, weaker than the consensus of $4.35. 

Qorvo (QRVO) closed down more than -8% Thursday after forecasting Q1 adjusted EPS of $2.00-$2.25, well below the consensus of $2.74.

Epam Systems (EPAM) closed up more than +10% Thursday to lead gainers in the S&P 500 after reporting Q1 revenue of $1.17 billion, up +50% y/y, and forecasting Q2 revenue of $1.14 billion, up +29% y/y on a GAAP basis.

Albemarle (ALB) closed up more than +9% Thursday after reporting Q1 net sales of $1.13 billion, stronger than the consensus of $1.03 billion, and raised its full-year net sales forecast to $5.2 billion-$5.6 billion from a prior view of $4.2 billion-$4.5 billion, better than the consensus of $4.4 billion. 

Booking Holdings (BKNG) closed up more than +3% Thursday to lead gainers in the Nasdaq 100 after reporting Q1 revenue of $2.70 billion, stronger than the consensus of $2.54 billion.

Across the markets…

June 10-year T-notes (ZNM22) on Thursday closed down by -1-3/32 points, and the 10-year T-note yield jumped +13.0 bp to 3.064%.  June T-notes Thursday plunged to a 3-1/2 nearest-futures low, and the 10-year T-note yield jumped to a 3-1/2 year high of 3.106%.  T-note prices plunged on concerns that the Fed may not be aggressive enough to get inflation under control.  Inflation concerns intensified Thursday after crude prices rose to a 5-week high and after economic data showed U.S. Q1 unit labor costs rose +11.6% q/q, stronger than expectations of +10.0% q/q.