Market Morning: Carnage Spreads, Real Estate Discourages, Tesla Surprises, Cook Warns

That Was Scary

The Nasdaq (NASDAQ:QQQ) had its third largest single day point drop in history yesterday below only April 4th and April 14th 2000. On the bright side, percentage wise, the fall wasn’t cataclysmic at only 4.43%. The record for a one day percentage fall is Black Monday 1987 when the Nasdaq fell 11%, so it would have to fall about 782 points to equal that feat. Things were looking decent at the beginning of the day but starting at around 2:30pm EST the selloff began to accelerate to the downside. In the last 22 minutes of trading, sellers pulled all the stops and desperately liquidated positions, the tech index falling a full 1.1% in less than a half an hour. Futures aren’t too bright this morning, with a jump of less than half a percent back up for now. Among the worst performers, now in total freefall, are Align Technologies (NASDAQ:ALGN) now down over 22% in premarket trading, and Advanced Micro Devices (NASDAQ:AMD) also down over 22%.

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Meanwhile, In Asia…

Yesterday’s collapse in US equities has echoed in Japan as the Nikkei 225 is down 3.7% at the close. Hong Kong is down almost 2% hitting a new 52-week low and China is doing the least badly down slightly less than a percent but oscillating wildly day to day, up over 4% two days ago and then down 2.3%. China has come out hinting that it would do “whatever it takes” to save its stock market, though the Yuan is still skirting 10-year lows against the US dollar. Macau stocks (NYSEARCA:BJK), China’s gambling jewel, are getting hit particularly hard in their worst rout since 2014, down over 3% yesterday and firmly in bear market territory down over 30% from May highs.

Not Even Tesla Could Overcome the Selling

Tesla (NASDAQ:TSLA) happily reported a surprise profit of $2.90 a share, blasting expectations of a 15 cent loss. This was the embattled electric car company’s 3rd quarterly profit in 32 quarter of trying to make a profit. Tesla shares were up strongly at the beginning of the day but got pulled down by the deluge of selling especially in tech stocks as the day grew late. Shares ended up down 1.92%. Shares traded in a 6% range for the day, with a low just under $286 and a high above $304. Lows in the morning were recovered, but the decline accelerated along with the rest of equities as the day closed out.

Real Estate Slow Down

New home sales cratered to a 2-year low in September. New home sales have now declined for 4 straight months, eerily similar to what happened at the peak of the housing bubble in 2006. At least partially responsible for the downward pressure has been rising mortgage rates, which discount the value of real estate the higher they go. The 30-year fixed mortgage rate has increased more than 80 basis points this year to an average of 4.85%, according to Freddie Mac.

Apple CEO Tim Cook Warns Against Data Collection

Data is being weaponized against consumers, says Apple (NASDAQ:AAPL) CEO Tim Cook. “Today [the private information] trade has exploded into a data industrial complex. Our own information, from the everyday to the deeply personal, is being weaponized against us with military efficiency,” Cook said at a conference in Brussels on data privacy Wednesday. Cook says he is concerned with the fact that as corporations collect more and more data about consumers, they will have more data on consumers than consumers have on themselves. Cook did not say much about data being collected by governments however, since he was calling on stricter regulations around data collections, meaning government oversight. So this might tour de force be a move to stop competitors from acquiring data that would help them edge Apple.

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