Bears Gain Steam as Rally Reverses
Stocks look like they’re going higher today, but that’s what the bulls thought at the beginning of the week as well. The S&P 500 (NYSEARCA:SPY) crashed through its 200 day moving average yesterday to the chagrin of bulls, and now has to try to regain it again, negating a 7-day rally that saw the index rise over 8% and decisively back through the 200DMA in what was thought to be a bottoming process in this rickety equities back and forth. But then stocks fell again yesterday, meaning the battle is not over. Today may be especially important, as futures started off strong and stocks are higher in the early trading hours. Asia was mixed today, Japan being down but China up, so the confusion seemingly extends beyond US markets.
Facebook Down For 30 Minutes Yesterday, World Has Conniption
As leader of the FAANG stocks at least by acronym positioning, Facebook (NASDAQ:FB) has a special place in the hearts of momentum investors, so perhaps Facebook being down yesterday for all of 30 minutes was enough to pull down momentum stocks in general. Perhaps not, but in any case, Facebook was down for about a half hour due to what the company is calling an error during a routine test. With the matrix down, people turned to Twitter to complain, and Facebook shares happened to fall 2.35%. Shares are down 35% since topping, deep into bear market territory at this point. Commenting on the borderline collapse of Western Civilization, the social media commented, “We’re sorry for the inconvenience.” Users took the apology in stride, continuing to comment to themselves at one another as soon as service was restored.
Brexit Negotiations Enter “Final Stages” Supposedly
Former British Prime Minister Gordon Brown has joined calls for a second referendum on Brexit as the first one may not have been democratic enough, and this as negotiations have supposedly entered their final stages, the end game, or various terms tagged by media to indicate that “this is it”. What this means practically is still unknown since the actual Brexit date isn’t until March 2019, and politicians rarely if ever finish anything of consequence ahead of time. More likely this is just another head fake to fool markets, loading up expectations that a deal will be finalized tomorrow, but then pulling the rug out from under the collected assumptions of traders. The pound (NYSEARCA:FXB) is gaining on reports of an imminent deal, so if it doesn’t actually go through, expect sterling to drop hard tomorrow. If it does go through, remember the time and date and where you are, as the conclusion of a deal of consequence between heads of state ahead of time could be a once-in-a-lifetime event.
Amazon Moving to the Big Amazon, Formerly Known as the Big Apple…and Virginia
Amazon (NASDAQ:AMZN) announced today that it would be breaking ground for its second headquarters in none other than New York City. The move may signal that the retail and cloud computing and Alexa giant may want to keep its eye on Wall Street by being right next door in order to exert its influence. The move to northern Virginia is right next to Washington D.C., another strategic area for some good lobbying, essentially placing the behemoth right next to the financial and political capitals of Planet Earth. Sleep well everyone. The 2020’s are going to be an interesting decade.