NASDAQ under pressure
Premarket trades were disappointing today, as Apple lost 2.4%, Facebook was down by almost 2%, amazon dropped 1.6%, Netflix was down by 1.7%, and Google fell 1.3%. Tesla erased 7.2% "after trouble after signs of trouble for the electric car maker in China emerged. The country`s Passenger Car Association reported a 27% drop of locally-made cars in April, while Reuters reported the company decided against acquiring more land next to its Shanghai plant." (Reuters).
Looking at these numbers tells us why NASDAQ`s future today has lost 2% so far, and there are no hopes for now to stop the sell-off mode of the market.
Ahead of tomorrow CPI numbers, and especially after today China numbers showed that PPI rose much more than expected to 6.8% (YoY) in April, now investors in the U.S selling the overpriced technology stocks, from concerns that rising U.S inflation also will push the central banks to Hawkish monetary policy and raise the rates.
According to the definitive data, all the groups in Europe were also lower today; however, technology shares had the heaviest sell-off there. Europe`s Stoxx 600 index fell 2.3% so far today.
The USVIX index also jumped above 22 earlier, up to 22.33, added the wall-Street fears. The fear sent Main indexes much lower again in the first trading hours, 1.2% on average.
"The underlying driver is that there is still a rotation out of duration (higher interest rate) sensitive parts of the market, and this is why tech stocks are coming under pressure now," said Mizuho`s head of multi-asset strategy Peter Chatwell. He added, "Given the rise in the earnings power of these firms, different governments will also seek to raise more tax revenue from them in the coming years."
Based on a Reuters report, overpriced stocks` sell-off will continue in May, which caused Amazon to lose $140B so far, and Tesla`s loss was over $440B.
