Rolling coverage of the latest economic and financial news, as sterling weakens and tech stocks rout worries markets
- Introduction: Sterling has fallen to $1.293 this morning, lowest since late July
- No-deal worries are rising
- Markets nervous after tech stock slump last night
- Tesla has lost a third of its value in a week
- Travel and hospitality stocks hit by vaccine pause
Like a boxer clambering back off the mat, the US stock market is on track to jump when trading begins in under an hour’s time.
Yesterday’s rout, driven by energy companies and tech stocks, drove the Nasdaq index down 4% into correction territory – as it has shed 10% of its value since hitting a record high last week.
US Opening Calls:#DOW 27730 +0.80%#SPX 3367 +1.00%#NASDAQ 11238 +1.51%#RUSSELL 1518 +0.91%#FANG 5102 +2.55%#IGOpeningCall
Warren Buffett once noted that ‘A pack of lemmings looks like a bunch of rugged industrialists compared with Wall Street when it gets a concept in its teeth’ and those investors who piled in to tech stocks must now ask themselves why they were buying and what they should do after three days of sharp falls,” says
“If they were just buying because they felt everyone else was and were simply looking to flip the paper on to someone else, they may feel pretty exposed and unsure of what to do. If they were buying out of conviction that companies such as Facebook, Alphabet, Amazon, Apple, Netflix and Microsoft – the FAAANM sextet which still represents represent a quarter of the S&P 500 index’s total valuation on its own – have such dominant market positions, shrewd management, strong finances and powerful future cash flow prospects that they deserve even higher valuations then they may be inclined to buy on the dips.
At around $1.29, sterling is down a cent against the US dollar today, and down nearly five cents since the start of the month.
But as you can see, it’s still only a six-week low.