Investors
should not only be worried about the drop in Facebook equities, but also about
FAANG stocks which have been leading the bull market for many years. Alphabet
dropped 3% yesterday, while Apple, Netflix, and Amazon declined 1.53%, 1.56%
and 1.7% respectively.
Though
the fall in Facebook might have impacted the sector negatively, it does not
explain the full picture. Concerns that the European Commission will impose new
taxes on Tech firms in retaliation for U.S. steel and aluminum tariffs, is an
early indication that the trade war should be taken more seriously. If markets
decided to turn on FAANG stocks, we would likely see a similar reaction to last
February’s correction.
Jay Powell Fed
& the dots
The
newly appointed Fed Chair, Jay Powell, will hold his first press conference
tomorrow, when the U.S. central bank is expected to raise interest rates for
the first time in 2018. Markets have fully priced in a 25-basis point rate
increase, so do not expect this to have any influence on the dollar’s
direction.
The
key to dollar traders is how Fed officials, led by the new Chair, will act on
recent economic data and whether the fiscal stimulus will eventually lead to a
tighter monetary policy in 2018. Market participants are split on whether the
Fed will project four rate hikes in 2018 compared to three in the last meeting.
An upward shift in the dot plot should support the dollar, although it is
likely to lead to further flattening in the U.S. yield curve.
Brexit transition
deal sends Sterling higher
The
pound was the best performing currency on Monday, rising 0.6% against the USD
to trade back above 1.40. The Brexit deal was thought to be more positive for
Sterling, but given that no agreement was reached on the Irish border, gains
were capped. We believe that Sterling may still have further room to appreciate
against its peers, especially if Consumer prices today and wage data tomorrow
provide new signs of inflationary pressure before Bank of England meet on
Thursday.
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it, click on the link below:
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
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