FAANG re­cov­ery stead­ies mar­kets

Irish Independent - Business Week - - FRONT PAGE -

WORLD mar­kets were sub­dued ahead of the Thanks­giv­ing hol­i­day in Amer­ica, but US stocks climbed – with tech ral­ly­ing as the steep losses from Tues­day’s ses­sion got a hair­cut.

All ma­jor eq­uity bench­marks were higher, with the Nas­daq in­dexes pac­ing gain­ers and eras­ing more than half of Tues­day’s de­cline. Con­sumer dis­cre­tionary shares and com­mu­ni­ca­tions ser­vices com­pa­nies paced the in­creases in the S&P 500 In­dex.

Ap­ple, which had lost 7.5pc in the first two days of the week, rose slightly.

“The FAANGs [Face­book, Ap­ple, Ama­zon, Net­flix and Al­pha­bet’s Google] were do­ing all the heavy lift­ing for the in­dexes, and now that that’s come un­wound some­what,” said Craig Broth­ers, head of fixed in­come at Bel Air In­vest­ment Ad­vi­sors.

“Tech had an over­size ef­fect on the rally and an over­size ef­fect on the sell­off, be­cause it’s such a big por­tion of the in­dexes.”

The dol­lar weak­ened af­ter MNI re­ported the Fed is con­sid­er­ing end­ing a cy­cle of in­ter­est rate hikes as early as the spring. In ad­di­tion, US data showed that durable goods or­ders de­clined and fil­ings for un­em­ploy­ment ben­e­fits rose. “The mar­ket is re­ally trad­ing on tech­ni­cals, a lot of the tech names are very over­val­ued,” said Rahul Shah, chief ex­ec­u­tive of­fi­cer of Ideal As­set Man­age­ment.

“For a name like Ap­ple, you could ar­gue that some buy­ers are com­ing in at this level. But, over­all, to­day’s ac­tion might be an over­sold bounce. I wouldn’t read it as a shift in the tenor of the mar­ket.”

Banks and telecom­mu­ni­ca­tions com­pa­nies led an ad­vance in the Stoxx Europe 600 In­dex as op­ti­mism for a com­pro­mise on Italy’s bud­get buoyed stocks. The euro gained and Ital­ian bonds firmed on re­ports the Ital­ian gov­ern­ment may be open to bud­get re­vi­sions as the Euro­pean Union took a first step to­ward fin­ing the coun­try.

Ap­ple’s plunge on Tues­day hit sup­pli­ers in Asia, send­ing the lead­ing bench­mark track­ing Asia-Pa­cific stocks lower. Oil re­bounded from a one-year low to leap above $55 a bar­rel, even as US Pres­i­dent Don­ald Trump urged Saudi Ara­bia to keep re­duc­ing prices.

Bloomberg

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