Investing.com | Jul 26, 2021 12:31
A global selloff after China tightened regulations in the local for-profit education technology sector was exacerbated by the rise of global COVID cases, pushing futures lower on the Dow, S&P, NASDAQ and Russell 2000 in pre-US open trading on Monday. This week will also be the busiest earnings week in the US market, plus on Wednesday the Fed is set to release its interest rate decision.
Oil continued to weaken as markets are concerned about future demand. Yields continue dropping.
A glance at US futures paints a clear picture of market sentiment. Both value and growth stocks are down, suggesting traders on both sides of the reflation trade are pessimistic.
In Europe, the STOXX 600 Index was lower as a direct results of China's latest crackdown, as well as the ongoing spread of the coronavirus across the globe. Prosus (AS:PRX), the Dutch technology investor that owns 28.9% of Chinese internet mammoth Tencent (HK:0700) plummeted 8.5% as China’s clampdown on the tech industry intensified.
Automobile makers—a victim of the stay-at-home environment—were under pressure. Porsche (F:PSHG_p) declined 4.5% as the stock turned ex-dividend and Faurecia (PA:EPED), the French car parts producer, slid 4.3%, even though the company increased its 2021 net cash flow target.
The one bright spot in the travel sector was Ryanair (LON:RYA), Europe’s largest low-cost carrier, which topped the pan-European index with a 4% jump, after it raised its sales outlook on strong summer bookings.
China’s regulatory eye roamed over the country's expanding technology sector, particularly the for-profit education sector that has ballooned into a $100 billion industry as the government of the People's Republic of China said education has been “start accepting the cryptocurrency. The move broke our last trade wide open
Oil continued its selloff as the Delta strain once again clouded the demand outlook.
The resistance by the neckline of a small H&S top suggests perhaps the recent leg down was the first of what may be a second, though the trend remains higher.
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