Unless you been under a rock today you must know it has been a MANIC Monday trading kind of a day. Global stock markets saw deep losses Monday in the wake of a report over the weekend that Facebook suffered a data breach. Facebook dropped as much as 8.1% on Monday, the biggest intraday decline since August 2015, dragging major indexes lower.Facebook was just one factor behind an ugly sell off in stocks that took the Dow down more than 300 points Monday.
The trade dilemma still squirrels around in regards to whether this become a world wide trade war with some of the planet’s biggest economies involved. That in addition to the growing scandal of the Russian investigations have economist doubting that the economy can grow at 3% as predicted.
U.S. interest rates, meanwhile continued to rise Monday. Typically, Treasury yields fall when stocks sell off, because investors seek safety in the bond market. Instead, the 2-year yield reached a new nine year high of 2.32 percent early Monday, and the 10-year yield also rose, to around 2.85 percent.
And to add to the complexities of how tech securities performed today, reports suggest that DropBox IPO was oversubscribed. Meaning there were more investors than it was shares to be offered. The market appears to be in constant flux, not free fall but definitely inconsistent flux as of late. It would appear we’re not getting an exact replicate of the market performance we got in 2017.
But nevertheless, the market is alive and well. Gains can still be made if we are strategic in our acquisition of shares and taking of profits. Fundamentally sound companies will always whether any market inconsistency. This might be a great time to be defensive by diversifying your risk with more mutual funds and ETF. As oppose to one individual stock in a sector. Just remember that it’s market conditions like these where legends are made and investment philosophies tested.
I hope you all have a prosperous and productive week. Please feel feel to contact me in regards to any stocks or securities research matters. I’ll be talking with you all soon.
Jamaal W Vetose
Director of Research & Analysis