Global Market Slide, Tech Wreck Drives Losses, US Market De-FAANGed

Asian Down On Global Woe

Asian markets closed down across the board on Tuesday as mounting global woe rocked the market. The Chinese ShangHai and Hong Kong Heng Seng led with losses greater than -2.0% while others in the region fared better. The Japanese Nikkei was down a more modest -1.10% despite growing weakness in the automotive sector while in Korea and Australia losses were well below -01.0%.

The Nissan board has issued a statement saying that Carlos Ghosn and another board member had been under-reporting their compensation “over many years”. The misrepresentation is material to their disclosure requirements and a violation of Japanese financial regulations, a breach that resulted in Ghosn’s arrest on Tuesday. With his arrest comes the natural question, because he’s the CEO of multiple car companies several countries have done the same thing elsewhere?

Europe Down As Tech-Wreck, Banks Lead Losses

The European market was broadly lower at mid-day on Tuesday on weakness in tech and banks. The banks were down on a combination of factors that include Brexit uncertainty, the Italian budget stand-off, slowing domestic growth, slowing global growth, and trade concerns. The sector sank despite positive results from UK lemder Cybg. The UK lender says pretax profits rose 13% in the last year, it also says management has “planned for a period of uncertainty” and sent shares down more than -10%.

Shares of Renault fell another -2.5% in early trading as the Carlos Ghosn scandal ripples through the market. Ghosn, also CEO of Renault, is likely to be ousted from his position at Renault as a result of his arrest. He may also have under-reported his compensation in France.

Tech-Wreck De-FAANG’s US Market

Tech led the global decline and was felt nowhere more strongly than among the FAANG stocks. Facebook, Amazon, Apple, Netflix, and Google all shed at least -2.0% on Monday, most shedding more than -4.0%, as fear of slowing growth hit the sector.

A report that Apple had cut orders for one of its iPhone X models sent a shockwave through the market that affected the entire supply chain and all technology related to mobile. Shares of FAANG continued their slide on Tuesday adding at least -1.0% to individual losses and plunging the group deeper into bear-market territory.

Downward pressure in retail also had the market moving lower on Tuesday morning. Misses from Target and Kohl’s had shares of those stocks down more than -10% despite positive reports from both companies.

The tech-heavy NASDAQ Composite led the major indices lower in pre-market futures trading. The index was looking at a loss of -1.58% followed by -1.10% declines for the both the S&P 500 and Dow Jones Industrial Average. Trading volume is going to be light on Tuesday, Wednesday, and Friday because of the Thursday holiday. Traders should beware of volatility, exaggerated market movements, and whipsaws.