News & Analysis

U.S stocks lose gains close lower – Amazon leads Tech lower; USD knocks risk lower after positive start

Oct 29, 2018 | Market Updates

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MED – AUD Building Approvals 11:30 – AUD RBA Assist Gov Bullock Speaks 13:10 –  EUR Quarterly Prelim Flash GDP 21:00
High – USD CB Consumer Confidence 01:00 – CAD BOC Gov Poloz Speaks 06:30

Wild night for U.S shares, the Dow moved in a 900 point daily range, traders reacted to the possibility of more U.S.-China tariffs coupled with a drop in tech shares for the decline. The Dow Jones gave back an opening lead to finish 245 pts lower. Boeing dropped 6.6% The S&P500 closed 17.44 pts lower taking in into correction levels. The Nasdaq lost a further 1.6% as Amazon shares were hammered. “I think this is an old-fashion tech wreck,” said Mike Bailey, director of research at FBB Capital Partners. “Investors are reassessing growth prospects for next year.” Amazon dropped 6.3%! These losses offset strong gains from bank shares.

Bloomberg News reported that the U.S. is planning on slapping tariffs on more Chinese products if upcoming talks between President Donald Trump and Chinese President Xi Jinping falter. Both countries have already implemented levies on billions of dollars worth of each other’s goods. This is something to watch as the trade war has taken a back seat of late, markets are skittish, a new flare-up on the tariff front could influence further selling. (time will tell) Worries over a possible slowdown in corporate earnings growth, as well as in the global economy, have sent the major indexes down sharply this month. CNBC

Europe got off to good start and held gains, investors reacted to news that China will announce a 50% cut in car purchase taxes and German Chancellor Angela Merkel plans to step down as party chairman. Auto stocks jumped higher, adding 3%. Banking sector also had a strong session. The U.K.’s finance chief, Philip Hammond, presented new budget plans for the country, in what is supposed to mark the end of years of austerity measures. CNBC Indexes closed, the DAX +134 – The FTSE +86.

Oil fell as Russia signalled its output will remain high and concern over the global economy put crude on track for its biggest monthly fall since mid-2016. USOUSD closed 79 cents lower at $66.71.

Gold fell on a stronger USD and higher equities before trimming losses as they sold off. Price dropped $10 to its low before closing around $5.50 lower. Risk was mainly higher into the London session with a tussle during most of it. The EURUSD dropping into the negative briefly before rallying. This was cut out in the US session when the USD found strength. The AUD, EUR and GBP all ended the day lower. The AUD was knocked back below.7050. The USD gained to the CAD and JPY. The Yen gained to the AUD but closed lower to risk majors.

This morning the ASX200 is trading 11 pts lower, we would be looking for a weaker start to the session for the Nikkei.

Good Trading from Eightcap

Sources; CNBC – All times are AEDT

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