Market News & Analysis
Tech stocks still having a great trade war, for now
Ken Odeluga October 10, 2019 12:28 AM
Though a Nasdaq crunch approaches in coming days
Technology remains at the heart of a U.S.-China dispute that is rooted in disagreements on trade but also intellectual property and more. Over the last few months, aside from steadily ratcheting up duties on goods produced in China and sold in the U.S., Washington has moved closer to an outright ban on supplying Huawei and added several other Chinese firms to an entity list. In recent days, the U.S. moved to blacklist more Chinese tech groups. Whilst Beijing has appeared more hesitant to levy specific measures against U.S. firms, these can’t be ruled out, leaving giant groups like Apple, Intel, NVIDIA – the manufacturer of specialist processors – and others, potentially in the firing line.
There is therefore a lot riding on substantive trade talks scheduled for the end of the week in Washington. Markets give every indication that expectations are low. So even if the only outcome is a very limited communique—for instance a pledge to hold off/suspend further retaliation pending more talks—market reaction ought to be positive. The obverse could yet upend sentiment further. Even after falling some 5% since late-July, the tech-focused Nasdaq 100 still leads U.S. indices with a 21% gain this year. That compares with second-best performer, the S&P 500 which has risen 16%. The NDX won’t sidestep further volatility if even limited trade-talk hopes are dashed.
NDX’s key trends remain broadly supportive, though some over-lying caution has crept back in since late last month, reflected by the market’s drop below its 21-day exponential average. The index continues to largely climb atop its 200-day average, which is now reinforced by the rising trend line off June lows. The best-fitting overhead counterpart of the rising trend draws an apex that is almost coincident with the week’s upcoming risk events. Nasdaq will thereby have an opportunity to mark the outcome of talks as constructive, or not, in the very near term.
US Tech 100 CFD – Daily [09/10/2019 17:33:19]
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.