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Markets a little higher this morning after another slide in US tech

Markets a little higher this morning after another slide in US tech 150 150 Realm

US technology stocks saw another sell-off on Tuesday with the Nasdaq index down 4.1%. Investors will be monitoring how European markets react this morning – as I write they have small gains. The Pound is lower again today and has fallen sharply this week. 

 

Global Macro

  • Consumer credit in the United States increased by $12.25 billion in July 2020 after increasing by an upwardly revised
    $11.4 billion in the previous month, missing market expectations of a $13.75 billion increase. Total revolving credit
    declined by $0.3 billion after falling by $1.8 billion in June, whereas non-revolving credit increased $12.6 billion after
    rising by an upwardly revised $13.1 billion. On an annual basis, consumer credit climbed by 3.6 percent after rising 3.3
    percent in the previous month.
  • Britain’s 10-year benchmark government bond yields tumbled to a 1-month low of 0.178% on Tuesday, on renewed fears
    about a no-deal Brexit as a fresh round of negotiations kicked off. Britain warned the EU that it was ramping up
    preparations to leave the bloc without an agreement as the two sides bicker over rules that govern nearly $1 trillion in
    trade. At the same time, the head of the UK’s government’s legal department Sir Jones resigned amid disagreements
    with the attorney general over plans to override parts of the deal on Northern Ireland. Meanwhile, EU’s chief Brexit
    negotiator Barnier issued a warning to PM Johnson saying that if he remains in the Brexit Withdrawal Agreement there
    will not be future free trade agreement.
  • The IBD/TIPP Economic Optimism Index in the US fell to 45 in September of 2020 from 46.8 in August, remaining in
    negative territory for the sixth consecutive month, as Covid-19 continues to take a heavy toll on the labor market.
    Americans became more pessimistic about federal economic policies and the personal finances outlook but the sixmonth economic outlook improved.
  • The Euro Area economy shrank 11.8 percent on quarter in the three months to June of 2020, slightly less than initial
    estimates of a 12.1 percent fall. Still, it is the biggest contraction on record, pushing the economy to a recession as the
    coronavirus restrictions hurt most sectors. Declines were broad-based: household consumption went down 12.4
    percent, investment plunged 17 percent, government spending decreased 2.6 percent. Also, exports sank 18.8 percent
    and imports dropped 18 percent. Among the bloc’s largest economies, Spain posted the biggest decrease in economic
    activity (-18.5 percent), followed by France (-13.8 percent), Italy (-12.8 percent) and Germany (-9.7 percent).
  • On Tuesday: European stocks ended lower as stocks, led by those in the technology space, slipped amid concerns about growth after data showed euro zone GDP registered its sharpest decline on record in the second quarter. worries about spikes in coronavirus cases in several parts across Europe, including Germany, France and the U.K., and rising possibilities of a no-deal Brexit too contributed to the weakness in European markets. US stocks showed a significant move to the downside, extending the pullback seen over the course of the two previous sessions. The major averages all showed substantial moves into negative territory. The weakness on Wall Street came as traders continued to cash in on recent strength in the markets, with the Nasdaq and the S&P 500 pulling back further off record highs.

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