Summary:
-
S&P500 pulls back from new highs
-
Swift drop in the European indices weighs on sentiment
-
Tesla tumbles after earnings disappoint
There’s been some fairly sharp selling seen in US benchmarks this afternoon as a large swoon in European indices has soured sentiment on the other side of the Atlantic. The German Dax has reacted angrily to the latest ECB announcements with the market tumbling 300 points in less than 2 hours from its highest level in 3 weeks.
The Dax has plunged 300 points in less than 2 hours after Draghi failed to deliver a reassuring enough message for equity traders. Source: xStation
The market reaction, to what was on balance a fairly dovish message from Draghi and the Governing Council, could be seen as a pretty damning indictment of how dependent the latest equity gains are on highly accommodative monetary policies. With the bar so high for both the ECB and the Fed this raises concerns that they will be unable to clear it and should the latter disappoint at their rate decision next week then the recent peaks made today could go unchallenged for some time.
Today’s break higher for the S&P500 could prove to be a false one. Negative divergence seen on MACD but needs daily reversal candle to confirm (Bearish engulfing on close at 2996 or lower). Source; xStation
One individual stock that’s having a particularly big day is tesla, and unfortunately it’s a big down day. The electric car maker reported its latest trading update after the bell last night and announced a loss of $408M, or $2.31 per share. This compares favourably to the $718M loss, $4.22 a share in the same period a year ago, but that should hardly be seen as a big success. Sales rose to $6.3B from $4B a year ago. Consensus forecasts according to FactSet analysts were for a loss of $0.35 per share and sales of $6.5B. The stock is lower by 14% at the time of writing.
Tesla is experiencing a double-digit decline after the latest set of results disappointed. Source: xStation
