- November 20, 2018
- Posted by: Trading
- Category: Market Overview
- Tech rout pushes global stocks, US futures lower
- 10-year Treasury yields set for reversal
- Dollar fights to remain in uptrend
- BTC falls toward $4,600, hitting a 13-month low
European stocks and futures on the , and joined Asian equities in a selloff this morning, after a sharp decline in tech shares dragged US equities significantly lower on Monday. The is fighting to maintain its mid-term uptrend, and the yield on Treasurys is set to complete a reversal.
The slipped lower alongside technology and banks shares today after US software developers and semiconductor manufacturers weighed on the yesterday.
Nissan Weekly Chart
After yesterday’s, arrest of Carlos Ghosn, Nissan’s chairman, on charges of financial misconduct added to the US-led selling, during today’s Asian session Nissan Motor shares (T:) plunged 6.41 percent. However, dip buyers pared losses to 5.45 percent. The Japanese car maker’s stock fell to the lowest level in 16 months, within 7 percent of the long-term uptrend line since the 2009 bottom.
China shares underperformed, with the dropping 2.13 percent and the giving up 2.83 percent. Hong Kong’s fell 2.03 percent. Australia’s outperformed, falling the least, 0.38 percent, reversing yesterday’s underperformance.
Global Financial Affairs
Yesterday, big tech continued to wreak havoc on broader US markets. The latest worries pressuring the sector were concerns about potential new regulations for the industry, even as the trade dispute saga escalated in the background. All major benchmark indices were down at least 1.5 percent, with the and the leading losses, tumbling of over 3 percent.
Technically, the NASDAQ Composite completed a symmetrical triangle, bearish in a downtrend, with a one-percent downside breakout. The NASDAQ 100 slipped to its lowest level since April on renewed fears that trade jitters will impact global demand and cause disruptions in the supply chains of the major technology companies, which have led the US bull market for almost ten years.
Meanwhile, the most significant drop in homebuilder sentiment in more than four years hammered the housing sector as well.
Also, a slowdown in exacerbated the background risk-off sentiment, adding to the hurdles that are currently holding equities back from returning to pre-October correction levels and resuming their long-term uptrends. More specifically, downbeat figures highlighted some flows in the previously stellar macroeconomic data, adding to fears of a deeper market correction. Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said that investors should expect low returns for a long time after years of low interest rates and quantitative easing.
The yield on 10-year notes provided a downside breakout to a double-top reversal, as investors rotated out of equities and into Treasurys.
The dollar bounced off the day’s lows, forming a bullish hammer, as it struggles to remain within its ascending channel. Yesterday we posted a buy recommendation.
The stabilized after UK Prime Minister Theresa May’s moved to appeal to business leaders to back her Brexit proposal. Rumors of a plot to oust her are abating.
Bitcoin Weekly Chart
tumbled lower for a second day, hitting $4,623 for the first time since October 2017—in line with our forecast from last week.
WTI Daily Chart
dropped below $57, giving up a 1.16 percent advance to $57.38, though it later rebounded. The pattern was forming a rising flag, bearish after a decline. Also, after the 50 DMA crossed below the 100 DMA, it’s threatening to do the same to the 200 DMA. The commodity is struggling to find direction as some of the bigger players in the market—Saudi Arabia, OPEC, Russia, the US—are trying to re-define their position on the global stage.
- Canada’s closed down 0.56 percent Monday.
- The Stoxx Europe 600 fell 0.7 percent as of 8:13 a.m. London time, hitting the lowest level in more than three weeks with its fifth consecutive decline.
- Futures on the S&P 500 slipped 0.5 percent to the lowest level in three weeks.
- Italy’s dropped 0.5 percent, hitting the lowest level in more than three weeks with its fifth consecutive decline.
- The UK’s slid 0.4 percent.
- The edged 0.3 percent lower to the lowest level in almost three weeks.
- West Texas Intermediate crude declined 0.7 percent to $56.81 a barrel.
- The slid 0.7 percent to 84.27.
- fell 3.8 percent to $4.52 per MMBtu.