Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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The flight from big tech continued yesterday, dragging down the wider stock market and the Nasdaq Comp in particular. Advanced Micro Devices (AMD) led the charge, dropping over 7% on Thursday, while fellow chipmaker Nvidia (NVDA) had fallen 3.7% by the closing bell. Shares in semiconductor manufacturer Qualcomm (QCOM) also fell 3.6% despite a strong quarterly report the day prior. Meanwhile, Microsoft (MSFT), META and Amazon (AMZN) all saw dismal price action during yesterday’s session. The push in artificial intelligence is leading to a growing entanglement between various tech companies, which are investing huge sums of money into one another. AI depends on the aggregation of many different parties, including semiconductor and chip manufacturers, data centres and cloud infrastructure, software companies, energy providers and cybersecurity firms. Whether they are justified or not, the incestuous nature of such operations is starting to make some investors fearful of a bubble.
The US government shutdown lingers on, which means that markets will miss a second consecutive non-farm payrolls release. In its absence, the ADP employment report, which would traditionally play second fiddle to the more official NFP numbers, has come to occupy a more prominent place. The report, published on Wednesday, surprised markets with 42 thousand additional jobs in October, beating estimates of 25 thousand. The figures did something to ease fears of a deteriorating US labour market, although the Fed is still missing a number of crucial data points to guide its next rate decision in December. Odds are shifting closer to 50-50 as to whether the dollar will receive another rate cut before the end of the year and investors are understandably tentative with future allocations. The shutdown is also causing a degree of nervousness due to the lack of liquidity in financial markets, particularly cryptocurrencies. Once the deadlock ends, a wave of cash should quickly flow out of the Treasury General Account, rapidly changing market dynamics.
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