Oil, gold, other commodities tech stocks, and markets all slumped heavily on Tuesday and that means another rough day today in Australia and Asia.
Oil futures shed between 6% and 7% of their already depressed value in a session.
The savaging of US technology stocks on Monday dragged the wider global market lower yesterday – China and Hong Kong both fell more than 2%, markets in Europe fell by between 0.7% and 1.87%.
Then last night the slide accelerated on Wall Street that produced a 2.2% slide in the Dow, 1.8% for the S&P 500 and a 1.7% slump for the Nasdaq which at one stage had lost well over 2%. At one stage the Dow was down more than 600 points.
President trump blithely blamed the Fed raising interest rates before boarding Air Force 1 which was taking him to his Florida bolt hole for Thanksgiving where he will watch TV, mix with cronies and play golf.
Wall Street’s tech sell-off wasn’t helped on Tuesday by a weak third-quarter report from Target, the country’s biggest retailer.
Company comments about rising investments and costs to build new value saw the shares slump nearly 11%, which knocked the support from under the sector in the lead up to the huge Thanksgiving retailing season starting Thursday.
Gold dipped to just over $US1,221 at settlement and was trading around $US1,223 in early Asian trading.
The ASX 200 ended down 21.9 points or 0.4% on Tuesday thanks to a half-hearted rebound in late trading which trimmed the day’s losses – no such relief today when the overnight futures market showing losses of 50 points or more.
And the story is the same – oil prices sliding to their lowest level in a year and wiping out 2018’s gains. Copper fell as did iron ore (off 2% to $US74.65 for 62% Pilbara ore), silver also fell. But oil was the startling loser even after the long slide since October.
Brent, the global pricing benchmark, fell as much as 7.6% — or $US5.08 a barrel to hit an over 11-month low of $US61.71 before recovering slightly to trade at $US62.23. Brent lost all its 2018 gains.
The US price benchmark, West Texas Intermediate dropped 7% — or $US3.99 a barrel to $US52.77 — its weakest level since October 2017. WTI gave up all its gains for the year earlier this month and continues to fall deeper into bear territory.
The sell-off in coincided with a slide in world equity markets led by technology stocks. “Oil prices are under pressure in the face of ample supply, falling stock markets, and an increasingly gloomy economic outlook,” said analysts at Commerzbank.
The entire tech sector is being battered, with members of the FAANG group down more than 20% from their yearly highs. Facebook rose slightly in Tuesday’s trading session, but it is down nearly 40% from July. Since going public at $US38 in 2012, Facebook has never had a down year, but 2018 could well be the first. Apple shares fell 4.8%, Amazon was down 1.1%, Netflix 1.4%.
