Tech Stocks Continue Heavy Fall with Profit Booking Spreading to more Stocks
With the proposed changes in interest rates by the Federal Reserve and increasing bond yields, tech companies have become the centre stage of profit booking in the U.S. market. The tech-heavy NASDAQ 100 index is down more than 2% in the first hour of trading, and it is on route to being its worst month in the last one year.
Shares of the biggest companies in the world including Apple, Google, Amazon and Facebook are down 2-4% in the day. Investors have shown lesser interest for U.S. debt after Secretary of the Treasury Jannet Yellen said that her department will effectively run out of cash around October 18 unless legislative action is taken to suspend or increase the federal-debt limit.
Stoxx Europe is down by 1.95%
Dow Jones is down by 1.23%
NASDAQ is down by 2.53%
China Needs More Coal To Fight Energy Crunch
The Chinese government is under a lot of pressure to speed up the Coal imports to deal with the power crisis in the world’s second largest economy. Multiple industries are forced to conserve energy by reducing production. 70% of the country’s electricity generation is from coal, but President Xi Jinping’s plan to be carbon neutral by 2060 has adversely affected coal mining, leading to the energy crisis. A rise in demand after the ease of Covid restrictions has also boosted the situation. Goldman Sachs has cut its forecasts for China’s economic growth to 7.8% in 2021 compared with a year ago, lower than its previous forecast of 8.2%.
Sanofi Drops Its mRNA Covid-19 Vaccine Plan
French pharmaceutical company Sanofi said on Tuesday that it has dropped the plans to develop its mRNA-based COVID-19 vaccine. This is because of the success of its rivals, BioNTech-Pfizer and Moderna in using the technology to fight Covid. The company will instead focus on efforts with British partner GlaxoSmithKline to bring another COVID-19 vaccine based on the more conventional protein-based approach.
U.S. Sept. New-Vehicle Retail Sales May Take A Hit- Data
Major consultants J.D. Power and LMC Automotive said on Tuesday that U.S. retail sales of new vehicles during September are expected to fall nearly 25%. J.D. Power said that not enough vehicles are available in the inventories to meet consumer demand. Though consumers are ready to spend more on personal transportation, automakers are struggling due to the semiconductor shortage.
U.S Economy Is Far From Maximum Employment, Says Powell
Federal Reserve Head Jerome Powell said on Tuesday the U.S. economy is long away from achieving maximum employment. This is considered as the key requirement for raising interest rates. The Fed will continue buying $120 billion(Rs 8 lakh crore) a month in bonds to reach the maximum employment and inflation goals.
Ford Asks For Vaccine Status Of U.S. Salaried Employees
Ford Motors said on Tuesday it has asked its U.S. salaried employees to submit their vaccination status against Covid-19. The hourly employees will also have to follow the same by October 8. Major automakers including General Motors have already started the same. The company said that this will help them to comply with federal Covid-19 vaccination requirements
Brent Oil Cools Off from a Three-Year High as U.S. Equity Markets Fall
Brent Oil Futures erased its intraday gains to reach 3-year highs as equities in the U.S. market continued its fall. The international crude benchmark crossed the important psychological level of $80/barrel for the first time since October 2018.
There are signs that demand is going up with the current global energy shortage and falling inventories. West Texas Intermediate(WTI) Crude took resistance once again at the $76.8 level.