Big Tech drops

The US stock market saw its longest losing streak since January as a handful of big tech companies sold off. Equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. Chipmakers bore the brunt of the selling after ASML Holding’s orders tumbled. Market darling Nvidia led losses among the megacaps. After a 10% stock rally in the first quarter—the strongest start to a year since 2019—investors have been increasingly skeptical about how much further the market could go in the near-term, even accounting for the continued strength of the American economy. Here’s your markets wrap. —David E. Rovella

ASML’s orders may be falling, but sales to China by Europe’s most valuable technology company remained strong in the first quarter. This despite Biden administration-pushed curbs on exports of high-end chipmaking equipment. China remains ASML’s biggest market, representing 49% of system sales in the first quarter, the Dutch company said on Wednesday. By contrast, the proportion of sales from Taiwan more than halved while the US accounted for 6%, down five percentage points from the prior quarter.

UBS is planning another mass termination as it continues to digest former Swiss rival Credit Suisse, with more than a hundred people across the firm’s global investment bank said to be affected. Firings are also expected in the wealth management and markets units. While Chief Executive Officer Sergio Ermotti has given little guidance on what the overall number of job losses will be, the bank has said it aims to save around $6 billion in staff costs in the coming years. In particular, management has shown little appetite for Credit Suisse’s investment bank since the government-brokered merger was announced.

Europe’s economy is nearing the end of its malaise, according to European Central Bank President Christine Lagarde. Output in the 20-nation euro zone is “recovering and we are clearly seeing signs of recovery,” she told the Council on Foreign Relations in Washington on Wednesday. “We haven’t had a recession, but it’s been very, very slow and meager.” The ECB is almost certain to cut interest rates at its next meeting in June, offering some support for growth. Though thanks in part to the US Federal Reserve, what happens after that is increasingly uncertain.

Bankers are applying the idea of a “breakup fee,” a longtime fixture in corporate takeovers, to a very different kind of acquisition target: each other. Why’s that? The story begins happily enough, with a nearly $10 million offer from Jefferies Financial Group. The lucky hire was Dean Decker, a rainmaker at Credit Suisse. The catch: If Decker reneged before he started, a clause in his nine-page offer letter read, he’d have to pay Jefferies what amounted to a personal breakup fee. The price to walk away: $4 million. Walk away Decker did. Seven years later, the legal fallout is still raining down.

The US labor market has been near historic strength for much of the past two years. But the picture appears to be changing. In five states, there’s at least one unemployed job seeker for every vacancy. Connecticut joined California, Nevada, New Jersey and Washington in the list of states where the ratio of jobless people per opening is one or more. Meanwhile Arizona and New York are nearing parity with a rate of 0.9, according to February data from the US Bureau of Labor Statistics. A ratio of one or more is bad news for those who are looking for a job, but in line with the gradual cooling in the labor market that the Fed has been shooting for.

Over at Tesla, the stock has tumbled 37% so far this year as a slowdown in sales gave way to a steep dive. The company is planning to fire more than 10% of its workers—thousands of people—in a scramble to cut costs. And two of Elon Musk’s senior executives headed for the exits. A very bad week for the billionaire by any measure—but he still has friends. Tesla’s board will be asking shareholders to vote again on a $56 billion payout for the chief executive—the one that was rejected by a Delaware court. Tesla Chair Robyn Denholm criticized the Delaware Chancery Court’s January decision, writing in a proxy that it had second-guessed shareholders. For her part, Chief Judge Kathaleen St. J. McCormick described Tesla’s directors as “supine servants of an overweening master,” saying they hadn’t looked out for the best interests of investors.

Heavy rains that caused widespread flooding across the United Arab Emirates came after cloud seeding. The UAE has been carrying out seeding operations since 2002 to address water security issues, even though the lack of drainage in many areas can trigger flooding. With global warming threatening a surge in heat-related deaths, Dubai’s media office on Tuesday dubbed the downpours “rains of goodness,” despite flooded houses and overflowing swimming pools. But as Lara Williams writes in Bloomberg Opinion, the soaking has a more likely culprit.

During China’s biggest online shopping festival last November, orders poured in for upscale labels on Alibaba’s super-popular Tmall. But within days, brands including Burberry Group and Cie Financiere Richemont’s Net-A-Porter saw up to 75% of that sales value vaporize as consumers returned or cancelled purchases in droves. This unusually high rate of returns—well above the 20% to 30% seen as normal in the global luxury industry—has persisted since China’s sudden, calamitous exit from its Covid Zero restrictions more than a year ago.

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