Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Opening Bell: Tech Shares Sell Off As Renewed Inflation Fears Weigh Globally

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewMay 11, 2021 12:24
uk.investing.com/analysis/opening-bell-tech-shares-sell-off-as-renewed-inflation-fears-weigh-globally-200474650
U.S. Opening Bell: Tech Shares Sell Off As Renewed Inflation Fears Weigh Globally
By Investing.com (Pinchas Cohen/Investing.com)   |  May 11, 2021 12:24
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Over-valued tech stocks dented most by inflation fears
  • Oil stabilizes following US pipeline cyberattack
  • Bitcoin tumbles

Key Events

Yesterday's technology stock dump on Wall Street went viral on Tuesday,  sweeping across the globe in pre-US open trading this morning. Inflation concerns are at the center of the sell-off. Futures on the Dow, S&P, NASDAQ and Russell 2000 have all slumped.

The dollar continues to struggle and Bitcoin continues falling.

Global Financial Affairs

Contracts on the NASDAQ and Russell—both sides of the reflation trade—slipped the most, while stocks less connected to the cyclical rotation are faring better, with S&P 500 futures down just 0.8% and futures on the Dow Jones Industrial Average, which includes reliable blue chip stocks, are outperforming, receding only 0.5%.

In Europe, the STOXX 600 index and the UK’s FTSE each plunged over 2%, after both indices scored fresh all-time high records in trading on Monday. The two benchmarks have also suffered their worst slump in three weeks. Indeed, their charts have developed similar patterns, but the pan-European gauge was further along.

Stoxx 600 Daily
Stoxx 600 Daily

The STOXX 600 found support above its uptrend line, though it may be trading along a H&S top. The MACD confirmed its sell signal, and the RSI suggested that the price is set to complete a top.

Earlier in Asia, the MSCI Asia Pacific index fell the most since March. Japan’s Nikkei 225 shed 3% of its value, and stocks listed on Hong Kong’s Hang Seng dipped 2%.

China’s Shanghai Composite, though, rose 0.4%, after China reported a 6.8% jump, up from a 4.4% increase YoY, in the producer price index, its strongest increase on that metric since October 2017, as supply constraints cascaded into manufacturing. China’s economy was the first to recover from the coronavirus pandemic and the central bank there, the People’s Bank of China, has been adjusting policies to keep inflation in check.

US stocks slumped on Monday with technology stocks weighing on all indices. Surging commodity prices have heightened inflation anxiety and investors are now asking two US-focused questions that for now remain unanswered:

  1. Will inflation derail a growth rebound in the world’s largest economy and spoil a record stock rally?
  2. If inflation doesn't dent share price performance, will Fed tightening be needed to manage inflation, thereby causing a stock market slump?

The NASDAQ 100 fell 2.6%. Among the biggest losers: Apple (NASDAQ:AAPL) which also slid 2.6% and Tesla (NASDAQ:TSLA) which crashed, dropping 6.4%. The recent inflation scare is testing our bullish call on Tesla.

Tesla Daily
Tesla Daily

The real check for shares of the electric vehicle maker will be at $542.

The Dow topped 35,000 for the first time, but produced a powerfully bearish shooting star which found resistance by the previous, steeper uptrend line, suggesting a retest of the pennant and the main uptrend line.

Dow Jones Daily
Dow Jones Daily

The RSI provides a negative divergence.

Yields, including on the 10-year Treasury note, rose for the fourth straight day, but unlike the previous time the benchmark bond advance, this time stocks are falling.

The dollar continues to struggle.

Dollar Index Daily
Dollar Index Daily

The greenback was unable to climb back above its uptrend line as two patterns—the recent, short-term wedge, and the larger, long-term wedge—have clashed.

Gold found resistance for the third day in a row.

Gold Daily
Gold Daily

The yellow metal is at the top of its falling channel, despite dollar weakness, demonstrating a technical driver.

Bitcoin fell for the third day.

Bitcoin Daily
Bitcoin Daily

The most popular crypto by market cap is struggling against the bottom of a rising, bearish wedge, the second in a row, as it also paints the right shoulder of a H&S top, whose completion may halve its value.

Oil dipped as traders monitored progress on the reopening of the largest US oil-products pipeline, which was paralyzed by a cyberattack on Friday, and is expected to be mostly back online by the weekend.

Oil Daily
Oil Daily

The price remains within a rising channel, which, however, is still below the uptrend line since the November bottom. If the price won’t top $68 soon, it will at least keep ranging, if not retest the $58 lows.

Up Ahead

  • A range of Fed Reserve members are due to speak this week, including Governor Lael Brainard today.
  • US CPI will be reported on Wednesday and is forecast to show prices continued to increase in April.
  • On Thursday, initial jobless claims and PPI will be released. 

Market Moves

Stocks

Currencies

  • The Dollar Index declined less than 0.1%.
  • The British pound gained 0.1% to $1.4131.
  • The euro rose 0.1% to $1.2143.
  • The onshore yuan weakened 0.1% to 6.426 per dollar.
  • The Japanese yen weakened 0.1% to 108.89 per dollar.

Bonds

  • The yield on 10-year Treasuries gained two basis points to 1.62%.
  • The yield on two-year Treasuries climbed less than one basis point to 0.15%.
  • Britain’s 10-year yield increased four basis points to 0.826%.
  • Germany’s 10-year yield jumped four basis points to -0.17%.
  • Japan’s 10-year yield decreased one basis point to 0.078%.

Commodities

  • West Texas Intermediate crude declined 0.7% to $64.44 a barrel.
  • Brent crude dipped 0.7% to $67.85 a barrel.
  • Gold weakened 0.1% to $1,835.10 an ounce.
U.S. Opening Bell: Tech Shares Sell Off As Renewed Inflation Fears Weigh Globally
 

Related Articles

Nick Hilsden
Can The FTSE Rise To 7225 Today? By Nick Hilsden - Jun 16, 2021 1

Today's big event is the Fed later and we may well continue to tread water this morning ahead of that at 19:00BST this evening. Interestingly, with the S&P 500 dropping off the...

U.S. Opening Bell: Tech Shares Sell Off As Renewed Inflation Fears Weigh Globally

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email