US markets fell into negative territory, with the exception of the Dow Jones rising a 0.09% after paring earlier losses during the trading session. On Wednesday, just like most of last week it was all about tech stocks however not for the right reasons. Last week we had the technology sector being the best performing sector, with news headlines sending the FANG stocks higher and higher as seen through Amazon’s brief entry into the trillion dollar market cap club which at the moment only includes Apple which closed -0.65%, given Amazon’s 2.19% decline overnight. Despite tech stocks being the best performing sector rising 17.38% YTD, overnight they were the worst performers falling 1.50%.
The sector was hard hit as Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg testified in front of Congress, addressing online election meddling and their efforts to tackle abuse on their social platforms. By the end of the trading session Twitter shares were down 6.06% and Facebook shares closed 2.33% lower. A notable absence from the meeting included representatives from Google or parent company Alphabet Inc – Google shares closed down 1.01%. Finishing on the rest of the FANG stocks, with the rest of the group falling away, there was only one direction Netflix shares were heading as they closed 6.17% lower as stock failed to close above its 50 day moving average, a technical indicator investors keep an eye on (see chart below)
Energy stocks also added to the indexes losses as Halliburton fell 5.95% after it warned third-quarter earnings could be affected by moderating activity in the Permian Basin, an area rich in oil and gas. Moving into commodity markets, a fall in oil prices didn’t help energy stocks as a US Gulf storm threatened oil producing areas, however later weakened and operations were able resume. WTI crude fell $1.15 or down 1.65% to settle at $68.72 a barrel and Brent crude fell 90 cents or down 1.15% to settle at $77.27 a barrel.
Not helping the market was another day that US and Canadian officials met without agreeing upon a deal to replace the North American Free Trade Agreement (NAFTA). Chrystia Freeland, Canada’s foreign minister said on Wednesday officials have remained working hard to reach an agreement. On Tuesday, Canadian Prime Minister Justin Trudeau revealed that his country would not bow to certain requests at talks with the US. If that wasn’t enough information, President Trump also turned his attention to his dear friend China revealing that the US wasn’t ready to come to an agreement with China but said the talks would continue.
In currency markets, the dollar retreated against a basket of major currencies as the dollar index fell 0.3% to 95.154 while both the euro and pound strengthened following a report coming out from Europe which suggested British and German governments had abandoned key Brexit demands allowing for a potential easier path for Britain’s divorce from Europe. The pound was last up 0.4% at $1.2905 against the dollar while the euro was 0.39% higher at $1.1626.
Chart of the Day: Twitter Inc. (TWTR) Daily Chart