- Many Take Profits as Tech Run Dips
- USD Stabilizes Ahead of NFP Figures
- Weak German Data Also Hamper Euro Market
There was a big sell-off yesterday across the board which was predominantly felt by big tech. Stocks in the sector had been on a massive run up with the S&P 500 having its best August in more than 30-years. That run came to a halt yesterday as many traders took profits leaving the big names down on the day. The forex market was a beneficiary as the sell-off worked to boost the US Dollar slightly as non-farm payroll numbers are eagerly awaited.
Big Correction in Tech as Market Steps Back
Thursday trading brought an end to the mammoth gains which had been seen particularly in the tech sector. Both Tesla, and Apple which had seen huge demand both before and after their recent stock split, fell close to 9% each. The losses were felt across the sector with Microsoft, Amazon, and Alphabet all slumping to varying degrees.
Though they have fallen back slightly, all the names mentioned, and many others in big tech are up in huge numbers for the year, and certainly since the Covid-19 lows. Tesla alone is up hundreds of percentage points on the year. Analysts have cited this to be much expected behavior with the strong upward trajectory that has been seen simply unsustainable. The losses look set to continue into today as pre-market trading indicates a further, less pronounced slump at the opening bell.
Dollar Regains Some Strength Ahead of Key Data
Those forex trading the US Dollar have not had much to shout about of late. The Greenback has endured a torrid time as it has continued to display weakness and slip backwards against other major currencies. Perhaps lightly buoyed by the sell-off in big tech, the currency regained some stability on Friday. This comes on the day which August non-farm payroll figures are set to be released.
These NFP numbers are predicted to show a slight slowing of the pace when it comes to an employment return. In job creation, it is expected that around 1.3 million jobs will have been added in August. This is down from 1.76 million the previous month, though the lowest number of initial unemployment claims since March were filed last week at 881,000. This indicates a return to work, albeit slower than expected, with the unemployment rate also expected to fall below 10%.
Eurozone Struggles Continue With Disappointing Numbers
While the US market awaits results, figures in Germany have already given further strength to the USD according to forex brokers. German factory orders in particular disappointed coming in with a very small rise. This number joins the also poor drop in retail sales across the bloc of 1.3%.
The ECB are also said to be keeping a close eye on the Euro as it has strengthened quickly in recent weeks despite the number of challenges the region faces. This sentiment, and a pull back on the Euro and GBP would certainly be no bad thing as far as the US is concerned.