“Tech-Wrecked”: Global Stocks, US Futures Plunge As Panic Selling Returns
“The good news is: It’s Friday. The bad news is: everything else.” For traders, Bloomberg’s summary of today’s early morning action couldn’t be more spot on.
On the last day of a turbulent week, global market turmoil is back with a vengeance and traders in the US are greeted by another sea of red as stocks in Europe renewed their plunge along with Asian shares and U.S. futures as the tech-wreck returns after disappointing results from technology giants Amazon and Google slammed sentiment one day after a torrid dead cat bounce.
Disappointing Amazon and Alphabet results reignited investors’ anxieties about the overwhelming dominance of tech stocks – prized for seemingly unstoppable growth – in this market cycle, as well as peak earnings with e-commerce revenue growth now clearly rolling over. “There’s a huge amount of hot money in the FANG stocks,” said Christopher Peel, chief investment officer at Tavistock Wealth, and now it’s clearly going out.
The rosy picture of U.S. indexes finally ending their 6-day losing streak faded very quickly with Asian equities falling again, and after yesterday’s solid bounce, S&P futures were trading below the Wednesday session lows with the Nasdaq once again inside correction territory, down over 10% from its September highs.
The MSCI All-Country World Index was down 0.3% after trading began in Europe. It was set for its fifth straight week of losses, its worst losing streak since May 2013. “Expectations for US company earnings are quite high, so whenever they are not being met, the reactions are quite severe,” said Miraji Othman, credit strategist at BayernLB. “We have grown used to solid numbers, 18 percent revenue growth, 25 percent revenue growth and so on. The valuations have become quite ambitious.”
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