Financial market research and analysis

The US tech sector was a cause for concern overnight. An almost 4% slide in Apple and a sell-off in semiconductor makers led the decline in tech stocks, pulling US indices lower. Concerns over iPhone demand and fears that chipmakers would be caught up in the US-China trade war weighed heavily on demand. The Nasdaq was the hardest hit, down over 3% while the Dow and the S&P closed 2% lower.

The tech sell-off and trade war concerns dragged Asian stocks lower overnight and European bourses are pointing to a charge lower when the opening bell rings.

Apple Dives Almost 4%

Traders were quick to jump out of Apple on reports that the company has slashed production orders in recent weeks for all three iPhone models that were unveiled in September. Investors had been nervous about the outlook for Apple and its flagship devices since the firm announced that it would no longer be reporting a breakdown of sales figures by product in its most recent earnings update. News of slashed production orders has just confirmed those fears, forcing investors to reassess Apple’s outlook.

Safe Havens in Demand

Volatility spiked with the VIX, the fear gauge, pushing up to 21. Investors took risk off the table, increasing flows into safe-haven assets. The Japanese yen closed 0.2% higher versus the dollar overnight, whilst gold closed higher for the fifth straight session, also helped by the weaker dollar.

Dollar Steady

The dollar is holding steady after three consecutive sessions of losses. Whilst it would be difficult to call a top on the dollar, we are seeing investors increasingly price in a more dovish Fed. Last week’s more cautious comments from Fed officials are being seen as the start of a “slower growth narrative” which could be much more prominent in 2019.

Theresa May Back from The Brink

The pound traded in a tight range overnight, after mild gains from the previous session. News surrounding Brexit has been slightly more positive over the last 24 hours, as Theresa May tries to drum up support for her deal and as the Brexit rebellion in her own party stalled. The number of letters of no confidence has failed to reach the 48 required for a vote of no confidence so far. That is not to say that it won’t get there; when Theresa May puts the deal before Parliament could be another trigger point. At least, for now, Theresa May is back from the brink and the pound is liking it.

BoE Mark Carney Takes the Hot Seat

Whilst the focus will remain on Brexit and political developments, Mark Carney taking the hot seat before the Treasury Select Committee could provide a welcome distraction. Mark Carney will give his views on the health of the economy. We can also expect him to receive a grilling over no deal Brexit planning, which could prove to be a sensitive topic for jittery pound traders.