US stocks fell sharply last Thursday and Friday with the high-flying technology stocks experiencing the biggest contractions. Shares for Apple, Facebook and Amazon fell by more than 6%, Alphabet and Microsoft both fell by 4%. The pandemic has seen the major US technology stocks rally well, having reaped the benefits from the new working at home environment. The big sell-off at the end of last week has been described as a healthy market correction since tech stocks soared in value in August. Meanwhile, it emerged on Friday that the Japanese conglomerate Softbank bought billions of dollars’ worth of equity derivatives which contributed to the rally in big tech stocks in recent months. Softbank founder Masayoshi Son has performed very aggressive bets on equity derivatives with estimated trading gains of $4 billion. Last week also saw the US unemployment rate fall to 8.4% and another 1.4 million new jobs added to the labour workforce.
Market volatility is expected to continue as the US Election campaigns gather momentum ahead of November’s presidential vote. The polls currently favour former Vice-President Joe Biden with almost 40% of the vote set to be conducted by mail, which has not been well received by President Trump, an avid protestor against a postal election. Despite President Trump’s objections, his 2016 winning election saw a surprise 25% of the electoral votes cast by mail.
Elsewhere, Brexit negotiations continued to stall amid diverging views on fishing restrictions in place and the levels of governance the UK is willing to adhere to. Talks are to re-commence on Tuesday as negotiators head into the eighth round of talks.
Once again the bennefit of remaining globally diversified and not getting drawn into speculation or short termism shines through.
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