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Nasdaq falls in ‘tech wreck’

Nasdaq 100 – Daily Candlesticks
Source: GKFX / MT4 (December 1, 2020)

NAS100 saw a big bearish engulfing candlestick pattern that took the price back below resistance from the September peak. This is a ‘fakeout’ which could lead to a reversal back into the range. Long term uptrend support is found from the rising trendline connecting the July, September and October lows. 
 

TAKEAWAYS


•    Nasdaq dumps nearly 2% on Wednesday in sell-off of tech stocks
•    FTC sues Facebook, which could lead to breakup
•    DoorDash has huge first day of IPO, rising 92%
•    Gold falls back below $1850 per oz as stimulus talks turn acrimonious 
•    DAY AHEAD: ECB rate decision, US CPI data
 

GURU WISDOM


“I make no attempt to forecast the market—my efforts are devoted to finding undervalued securities.” - Warren Buffett
 

MARKETS


*Daily closing price
↘ EUR/USD    1.2082        (-0.16%)
↗ GBP/USD    1.3401        (+0.36%)
↗ USD/JPY    104.21        (+0.06%)
↘ S&P 500    3672.82    (-0.79%)
↗ Hang Seng    26,502.84    (+0.75%)
↘ Gold        1839.38    (-1.71%)
↗ Oil (Brent)    49.00        (+0.33%)
↘ Bitcoin    19,137        (-2.79%)
 

NEWS

Tech wreck

Tech stocks led the declines in overall markets on Thursday. The sector has been lagging in the recent market rally where ‘reopening’ and cyclical stocks have been preferred. In the first down day in six trading days, it was the Nasdaq that led the losses. 

The news that the US Federal Trade Commission and 46 states have brought antitrust cases against Facebook for anti-competitive behaviour meant Facebook led the declines alongside Apple, both of which fell around 2%. One possible albeit unlikely result of the action is a forced breakup where Facebook would have to divest Instagram and WhatsApp from its business.

Tech stocks have a long history of being sued for monopolistic behaviour, starting with Microsoft in the 1990s and going through to Google earlier this year. In none of the cases has it made much material difference to the share price but in none of the former instances was a breakup of the company ever ordered.
 

DoorDash


DoorDash was one of the most anticipated IPOs of the week alongside AirBnB, which debuts tomorrow. The stock had been priced at $102 but shares opened at $182 on strong demand and pushed up as high as $195.50. The online delivery company is yet to make a profit and could be another example of investor over-exuberance.
 

DAY AHEAD 

*Times in GMT
07:00    GBP    Industrial Production (MoM)(Oct)     0.3 %    0.5 %
12:45    EUR    ECB Interest Rate Decision         0 %    0 %
13:30    USD    Initial Jobless Claims(Dec 4)         725 K    712 K
13:30    USD    Consumer Price Index (YoY)(Nov)     1.1 %    1.2 %