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Tech Shares sink -DAX continues to tank; Late fight back from risk to USD; Cryptocurrencies Plunge

Sep 6, 2018 | Market Updates

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Tech shares tanked overnight leading the Nasdaq -96.07 and the S&P500 -8.12 points lower. The Nasdaq had its worst day since day since AUG 15. Facebook, Amazon, Netflix, Alphabet, Microsoft and Twitter all dropped leading the Nas and S&P500 into the red. Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg testified in front of Congress, addressing online election meddling and how to stop abuse on social platforms.

“When you have these corporate executives dragged to Congress, that makes the market more nervous,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. Pavlik noted the hearing raised concern over tighter regulations in the tech industry. “That’s why you’re seeing the market take more of a wait-and-see approach on these stocks.” “The threat of tech being the target of regulation is real,” said Ernie Cecilia, CIO at Bryn Mawr Trust. “But we have had a pretty good run up in tech. I think what you’re getting here is a rotation out of tech and into some of the other names that have lagged.”

Bucking the trend the Dow Jones added 22 points led higher by Caterpillar, trade continues in the spotlight, U.S. and Canadian officials met Wednesday to try and settle differences and secure a future deal on trade. The meeting takes place after the U.S. and Canada failed to secure a new agreement last Friday to replace the current North American Free Trade Agreement (NAFTA) pact. – CNBC

European shares continued in the red, the DAX tanking by 169.75 – the FTSE -74.58 and the Euro Stoxx 50 -43.17, as trade and tech dragged the indexes lower. Europe’s technology stocks were the worst performers, sliding 3.04% as a whole, amid rating downgrades. Credit Suisse slashed its target price for France’s Iliad, dropping 6.7%; while Jefferies warned the margin performance of Switzerland’s Temenos was likely to disappoint investors this year, sending its price crashing 11.3% lower. The GER30 CFD price which tracks the DAX closed below 12,170. This area had held for buyers since early April.

Oil continued lower on Wednesday, storm fears eased but supply concerns remain. U.S inventories data will be released early tomorrow morning at 01:00 AEST. The expectation is -2.2M change in U.S stockpiles. USOUSD closed close to 80 cents lower at $68.41.

Gold closed higher after a mixed session, the USD saw late selling setting up the higher close. Price added $6.38 and has continued higher this morning hitting 1198.81. Risk was far from stable last night in a real battle most the of the London session to the USD and JPY. The AUD hit 2-year lows before fighting back to the USD. The EUR moved to test weekly lows before recovering and closing 50 pips higher.

Positive Brexit news helped push the GBP higher to the USD and JPY. Bloomberg quoted people familiar with the matter as saying that Germany would be ready to accept a less detailed agreement on Britain’s future economic and trade ties with the EU in a bid to get a Brexit deal done. “We’ve heard these kinds of rumours lift the pound before and it should be treated with caution,” Neil Wilson, chief market analyst at Markets.com, said. “But nevertheless it does still point to a degree of softening in the general tone of talks and that a deal is more likely than not,” said Wilson.

Cryptocurrencies plunge amid report Goldman is putting crypto venture on hold. This news started the current two rout in Cryptocurrencies, selling has been widespread all the major coins seeing massive falls. Looking at Bitcoin, price lost over 1000 USD in value since yesterday till this morning. Price currently 505 lower at 6413. Quite a surprising reaction and really shows just how thin buyer confidence is atm.

This morning the local ASX200 continues to trade lower, -61 pts at this point in the day. Risk majors are slightly higher to the USD and mainly lower to the Yen. The USDJPY is 32 pips lower this morning retracing all of yesterday’s rally.

Bitcoin Carnage

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Sources; CNBC – All times are AEST

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