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Another Bearish Session for Stocks

20 November 2018

Stocks worldwide plunged on Tuesday and EU indices were trading at this year’s lows, while the US benchmarks dropped closer to October’ lows. The DAX index was down 1.2% during the London session, while the SP500 benchmark lost 1.5% shortly after the US opening bell and the Nasdaq was down another 2% to trade at 7-month lows.

Sentiment worsened further on Tuesday as FAANG stocks continued their demise, which dragged the entire stock market down.

From the macro data point of view, US building permits rose slightly from 1.241 million annually to 1.263 million annually, while housing starts jumped more than 6% from 1.21 million to 1.228 million. The homebuilders sector is one of the worst performing sectors this year amid rising mortgage rates.

US yields followed stocks lower as the risk-off sentiment usually benefits US bonds, which pushes their yields down. The greenback also surged today and the dollar index has managed to defend the bullish trend line for now.

Copper is now trying to breach from the big consolidation triangle to the upside, which could be a positive signal for inflation outlook, but also for cyclical stocks and therefore this commodity should be closely watched over the next days.

Disclaimer:

Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or an investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses.

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Everything posted herein is the Personal Opinion of the Author(s) and does not represent a statement made by TeleTrade. TeleTrade is providing this for informational purposes.

Peter Bukov

Market focus

  • China: May industrial output up 5.0%, weakest in 17 years, retail sales rise 8.6% (16-year low)
  • France: consumer price index growth slowed to 0.1% in May
  • Germany: wholesale price growth slowed in May
  • Competitive currency devaluation could prompt global financial chaos - ex-PBOC chief

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