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Tech majors lead US stocks decline, West Texas climbs again

Published 18-SEP-2020 09:53 A.M.


3 minute read

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New sexual assault allegations have been made against US President Donald Trump.

Amy Dorris told the Guardian, that Trump “shoved his tongue” down her throat at the US Open tennis tournament over two decades ago.

Trump has denied all the accusations via his lawyers.

However, that wasn’t the only turmoil in the US.

The FBI has warned of a ‘steady drum beat of misinformation’ coming from Russia, who the FBI accuses of trying to undermine the coming elections by denigrating Democrat candidate Joe Biden.

FBI Director Christopher Wray said the bureau has witnessed “very active efforts by the Russians to influence our election in 2020”.

Wray has accused Russian agents of trying to affect the election through “malign foreign influence”, such as social media, state media and the use of proxies.

Americans go to the polls on Tuesday 3 November and there is a great deal to play out before then that could have wide ranging ramifications for the market.

Looking at the current state of the market, US stocks fell and Treasuries gained overnight as investors consider whether current levels of stimulus are enough.

Investors snapped up long-term Treasuries, following the Federal Reserve’s policy decision Wednesday, where Fed Chair Jerome Powell said the central bank would remain accommodative after relaxing its inflation policy.

“It remains to be seen how the long-term projection of near zero interest rates and more free-flying inflation will actually play out for the economy,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial Corp. “The somewhat dour tone from the Fed could weigh on investors.”

The central bank indicated it would leave interest on hold until inflation picked up significantly – expected to be through 2023.

Meanwhile, jobless benefits claims continued decline, falling by almost 1 million in the week ended 5 September.

Looking at the markets specifically, the benchmark S&P 500 dropped for the second day in a row, however did find a little bit of support after bouncing off its 50-day moving average.

Unsurprisingly, tech stocks continued their volatile run. They saw the biggest decline on the market: Apple Inc., Facebook Inc. and Microsoft Corp. all weighed the Nasdaq Composite down.

The S&P 500 Index declined 0.8% to 3,357.02, the largest drop in a week, while the Dow Jones Industrial Average fell 0.5% to 27,901.71, its first retreat in a week.

As for the Nasdaq Composite Index, it fell 1.3% to 10,910.28, while the Nasdaq 100 Index sank 1.5% to 11,080.95, its lowest in more than a week.

The Stoxx Europe 600 Index decreased 0.5% to 371.23.

The British pound barely moved at $1.2971, the euro increased 0.3% to $1.1847 and the Japanese yen appreciated 0.2% to 104.70 per dollar, the strongest in about six months. The Australian Dollar US Dollar exchange rate is trended lower on Thursday, snapping a four day winning streak. The pair is trading -0.3% at US$0.7285.

In contrast, the US Dollar is trading higher across the board following the aforementioned US Federal Reserve monetary policy announcement on Wednesday.

Finally, in terms of commodities, West Texas Intermediate crude climbed 2.3% to $41.08 a barrel, the highest in two weeks and gold weakened 0.6% to $1,948.03 an ounce.

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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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