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Equity Analysis and News

  • US Equities Erase YTD Gains, Nasdaq in Correction
  • Global Growth Prospects Deteriorating
  • Risk Off Sentiment to Persist

See our Q4 forecasts to learn what will drive price action through the quarter

Price

200DMA

RSI

Open Interest

IG Sentiment

Europe

FTSE 100

6928

7447

15

608,563

Mixed

DAX

11189

12483

17

98,408

Bearish

CAC 40

4976

5369

14

280,944

Mixed

US

S&P 500

2656

2766

22

2,790,639

Mixed

DJIA

24583

25132

23

89,815

Mixed

Nasdaq 100

7129

7133

34

259,545

-

US Equities Erase YTD Gains, Nasdaq in Correction

Another plunge in US equity markets saw the both the S&P 500 and DJIA erase its gains for year, while the tech sell-off led to the Nasdaq 100 moving into correction territory, dropping 12% from the record high in August after posting its biggest one-day decline since 2011. Despite US authorities suggesting that this correction in equity markets is healthy and Fed officials are adamant that the underlying economy remains strong. Concerns have been growing for the US economy with weakness in the rate sensitive housing sector continuing its descent after the latest new home sales data reported a 5% decline, following a 3% drop in August.

Global Growth Prospects Deteriorating

Warnings signs are on the rise that global growth prospects are deteriorating amid the US-China trade war. This has been reflected in the South Korean KOSPI index, typically seen as a barometer for global trade growth given the country’s large export orientation, which has now moved into bear market territory after seeing its sharpest decline since the financial crisis.

Risk Off Sentiment to Persist

Fragile sentiment in global markets may indeed persist as defensive sectors continue to outperform cyclical sectors. The spread between the US industrial Sector ETF and US Consumer Staples ETF has fallen to the lowest level since Sep 2017.

Global Market Sell-Off Continues, S&P 500 and DJIA Erase YTD Gains

Source: Refinitiv

KEY TRADING RESOURCES:

DAY TRADING INDICES

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX