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Tech drags markets

  • Junior Trader
  • Blog post submitted on 6th November 2018
06744 CC Trader Talk V2

US markets had a shaky start to the week and traded mixed on Monday with the Dow Jones Industrial Average climbing more than 190 points, whilst tech and internet stocks pull the Nasdaq lower. The Dow gained 0.8% to 25,461.70 and the S&P 500 added 15.25 points, or 0.6% to end at 2,738.31. The Nasdaq Composite Index fell 28.14 points, or 0.4%, to 7,328.85. China’s President Xi Jinping, speaking at a trade expo in Shanghai, vowed to address criticisms that its trade practices are “unfair,” by reducing its tariffs and opening up its economy to more imports.

European markets also closed lower, with the decline in shares of technology companies and banks overshadowing gains in the oil-and-gas sector. The pan-European Stoxx Europe 600 fell 0.2% to 363.50, after closing down 0.3% last week with the Italian FTSE MIB Italy index leading declines and falling 0.6% to 19,281.03. Germany’s DAX 30 closed down 0.2% at 11,494.96, and France’s CAC 40 ended the session virtually unchanged at 5,101.39 while the UK’s FTSE 100 rose 0.1% to close the session at 7,103.84.

Apple cuts demand forecast

Shares of Apple Inc. and its major suppliers fell sharply on Monday, following a report that the company was cancelling a production boost for its iPhone XR line, adding to concerns about the outlook for its biggest product category. The California-based tech giant told suppliers, Foxconn Technology Group and Pegatron Corp., to halt plans for additional production lines dedicated to its lower-priced iPhone XR line.

Demand concerns have weighed on Apple’s stock in the past few sessions, pushing its market value below $1 trillion. Apple said sales for the usually busy holiday period would likely miss analyst expectations as sales in emerging markets including India were weak causing shares in other Taiwan-based Apple suppliers to also fall sharply.

Amazon to split its HQ

Amazon.com Inc is planning to split its second headquarters evenly between two cities, people familiar with the matter said Monday, in a twist to a more than year-long contest that has drawn overtures from locales across North America. One of the major reasons for the decision was for Amazon, which has satellite operations around the world, to recruit top talent and attract new workers which are not already being targeted by Google and other tech firms.

The HQ2 split also could help Amazon ease the same degree of congestion and jump in costs of living that led to unrest in Seattle. An affordable housing crisis there prompted the city council to adopt a head tax on businesses in May, which Amazon helped overturn in a subsequent city council vote.

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