“The worst day of a terrible year”, “darkness and a sense of doom” — so the American media dubbed last Tuesday, November 20, when everything seemed to fall: from shares of high-tech companies to oil and bitcoin.
On Tuesday, all major American indices collapsed:
-industrial Dow Jones decreased by 500 points, that is, by 2.21%, to the level of 24 465.64;
-including shares of the 500 largest companies in the US market S&P 500 lost 1.8%;
The largest fall was in the securities of companies producing consumer durable goods, as well as energy and financial companies. For example, Apple shares fell by 4.37% and Google — by 3.09%. In total, FAANG – the largest tech giants of Facebook, Apple, Amazon, Netflix and Google — lost $1 trillion of market value in about a month and a half. This eventually led to the worst quarterly fall of the NASDAQ since the fall of Lehman Brothers in 2008, said the financial Times.
In addition, for Facebook, the market situation was exacerbated by internal problems, namely new scandals related to the safety of users and custom criticism of competitors.
The dumping of shares of technology companies launched a Domino effect and affected other sectors of the economy — investors began to sell securities of oil companies and retailers to protect themselves with safer assets.
Experts called the whole set of reasons that pushed the market down:
– falling oil prices;
– investors ‘ concerns about the slowdown in the global economy;
– the ongoing the US-China trade standoff;
– the recent purchase of shares of technology companies in the expectation of further growth of quotations, which was not justified.
“Simply put, the stock market has already begun to take into account the threat of a slowdown in the economy, “said the expert of the Bank Goldman Sachs David Kostin to CNN, and the head of the investment company Bespoke Investment Paul Hickey stressed that now “investors are fleeing the market.”
Oil after a sharp fall last week again went down – during trading the cost of the reference brand Brent fell by 7% to $ 61.97 per barrel. As a result, at the close of November 20, Brent cost $62.53 per barrel — almost 6.5% lower than on Monday, November 19.
“Black gold” against the background of the same concerns about the slowdown in the global economy pushed down and production records. At the same time, oil exports from Iran after the imposition of sanctions decreased not as much as previously expected.
And the reason for the fall on Tuesday was the statement of the US President Donald Trump that the country will remain a reliable partner of Saudi Arabia, despite the uncertainty in the case of the murder of journalist Jamal Hajikaji. It reduced fears due to possible disagreements between Washington and Riyadh, which supported the oil quotes.
Trump later confirmed that sanctions against Saudi Arabia would lead to a sharp increase in oil prices, which the US is trying to prevent. “With regard to Saudi Arabia, if we break off relations with them, I think oil prices will skyrocket. I hold them back, they [Saudi Arabia] help me to hold them back. Now we have low oil prices, I want them to be even lower,” the American leader said.
As noted earlier, oil after optimistic indicators since the beginning of October has already lost more than 20% in price. Bloomberg notes that now traders fear a repetition of the collapse of the oil market in 2014. Then the market was waiting for OPEC to reduce oil production, but the organization decided to wait. And as a result, from November to the end of 2014, oil lost about 30% in price, and in 2015 it fell below $40 per barrel.
Last week, the ruble relatively painlessly survived the fall of oil-then it was supported by exporters in need of currency before the tax period, and the news that we should not expect new serious us sanctions against Russia before the end of the year.
And although the evening of Tuesday, November 20, the dollar at the auction rose above 66 rubles, on Wednesday, November 21, in the morning it fell slightly — to 65.9 rubles, according to 13:30 GMT. Nevertheless, the Central Bank raised the official dollar rate on November 22 to 65.95 ruble. However, the peak of the tax period, which can support the domestic currency, is still ahead-November 26.
Bitcoin has also been affected by global negative trends. The famous cryptocurrency set another annual minimum, falling below $ 4.5 thousand. Its total capitalization fell by almost $20 billion, and the total capitalization of the cryptocurrency market fell below $150 billion — for the first time since the beginning of October 2017.