Jump to content

Global Markets Retreat as Tech Rout Spreads - EMEA Brief 21 Nov

Sign in to follow this  
JoeIG

  • FAANG stocks have now shed more than $1 trillion in market value since recent highs, whilst Target leads the fall in retail as its shares dropped 10.5% yesterday after posting worse than expected earnings figures.
  • The Nasdaq ended the day down 1.7%, whilst the S&P was down 1.8%. The Dow Jones dropped 550 points to close on Tuesday, erasing this year’s gains as it moved into negative territory.
  • Asian stocks slipped on Wednesday as intensifying fears on global economic growth and trade tensions grip the markets. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.45%. 
  • The ASX lost 0.5%, South Korea's KOSPI fell 0.4% and Japan's Nikkei retreated 0.35%.
  • Oil has bounced back around $1 a barrel to regain some of yesterday’s 6% plunge, backed by a report of an unexpected decline in US crude inventories. US crude currently trading at $54.31, Brent crude at $63.54.
  • Gold is steady at around $1223 an ounce.
  • Bitcoin fell as much as 16% yesterday, to its lowest level since September 2017. Pressure builds on regulators to increase oversight on cryptocurrencies.

Asian overnight: Another bearish session in Asia has seen declines throughout Japan, and Australia, with Chinese and Hong Kong markets ending up flat on the day. However, those losses could have been much worse, with much of the indices declining heavily in early trade, only to erase much of those losses throughout the latter part of the session. Meanwhile, crude prices took another dive overnight, after Donald Trump came out in support of Saudi Arabia in a written statement. It is clear he values the economic benefit of their relationship over the killing of Jamal Khashoggi, and thus the Saudi leadership could be more willing to listen to Trump over his desire to drag oil prices lower.

UK, US and Europe: The sharp sell-off of US technology stocks widened into a global market retreat on Tuesday, underpinned by fears surrounding continued trade tensions, slowing economic growth and weak corporate earnings in the US. Investors worry over sales of Apple’s flagship product, the iPhone, will slow down in light of recent reports that demand for the tech giant’s products in China has declined. This comes in addition as Goldman Sachs slashed its price target on Apple on Tuesday. Short term, unexpected weakness in the technology sector could have a significant impact on the global economy, adding to an already volatile macro environment.

In Europe, we are once again on the lookout for the magic 48th letter to spark a vote of no confidence against Theresa May, while the PM herself goes to Brussels to speak with Jean-Claude Juncker as both sides attempt to finalise a Brexit deal in time for Sunday’s summit of European leaders. Stumbling blocks still remain in the withdrawal agreement, over UK’s access to the EU single market and the issue of maintaining a soft border in Ireland. Looking ahead, public sector net borrowing from the UK forms the other notable event of the European session. In the afternoon, watch out for core durable goods, unemployment claims, and crude inventories from the US.

Economic calendar - key events and forecast (times in GMT)

image.png

Source: Daily FX Economic Calendar

1.30pm – US durable goods orders (October): orders to fall 1.8% MoM, and excluding transport to rise 0.2% MoM. Markets to watch: US indices, USD crosses

3pm – Univ of Michigan confidence survey (November): index to fall to 98.3 from 98.6. Markets to watch: US indices, USD crosses

3.30pm – US EIA crude inventories (w/e 16 November): stockpiles to rise by 1.7 million barrels. Markets to watch: Brent, WTI

Corporate News, Upgrades and Downgrades

  • Renault appoints COO, Thierry Bollore, as interim CEO while allegations against CEO Carlos Ghosn are investigated.
  • Engineering firm, Babcock International’s gross profit has fallen 64% to £65.1m in the half year September.
  • Chinese electronics giant Xiaomi is set to boost its operations in India from 500 to 5000 stores by the end of 2019.
  • United Utilities said that first-half pre-tax profit rose 7.7% to £212.5 million, while revenue was 4.6% higher at £916.4 million.
  • Sage reported a 16% rise in full-year pre-tax profit, to £398 million, and revenue rose 7.6% to £1.85 billion.
  • Kingfisher saw like-for-like sales fall 1.3% in Q3, as weakness in France hit performance. The firm also unveiled a £50 million share buyback programme. 

Ahold Delhaize raised to buy at Kepler Cheuvreux
British Land upgraded to buy at HSBC
CYBG upgraded to buy at Shore Capital

NegAustrian Post downgraded to sell at Berenberg
Indivior downgraded to sector perform at RBC
atives

IGTV featured video

Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Sign in to follow this  


0 Comments

Recommended Comments

There are no comments to display.

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      586
  • Latest Forum Topics

  • Our picks

    • A US-China trade deal?; hope for Brexit breakthrough; IMF updates on economic outlook - DailyFX Key Themes
      UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar stirred hope when they both offered enthusiasm after their meeting, saying there was a “pathway” forward as they discussed the contentious border. That was followed by a meeting between the EU’s main negotiator Michel Barnier and UK Brexit minister Stephen after which it was stated they 'look forward to these intensified discussions in the coming days'. Though nothing material has yet been agreed to, this seems like a meaningful break owing to the language alone. Neither side has voiced confidence in their discussions for some time, so this does represent a significant change. 
      • 0 replies
    • Dividend Adjustments 14 Oct - 21 Oct
      Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 14 Oct 2019. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video. 
      • 0 replies
    • Trade wars; recession fears grow; gold's position - DailyFX Key Themes
      We have been unofficially engaged in a global trade war since March 2018. That is when the United States moved forward with a tariff on imported metals (steel and aluminum) from any destination outside of the country.

      As it currently stands, we are still awaiting another wave of products receiving a hefty tariff rate upgrade in approximately two months’ time while talks are set to resume on Thursday between the two parties. That said, reports over the weekend indicated China was not impressed with the Trump administration’s most recent efforts to find middle ground.
      • 0 replies
×
×