Relief For Tech Stocks After Multi-Day Sell-Off As Virus Cases Spike Globally

Coronavirus cases are back at the top of the news agenda as spikes are reported around the globe. Countries including the UK, the Netherlands, and India yesterday revealed multi-week or month highs in confirmed cases, while several US states also reported climbing numbers of both new infections and deaths.

Amid the resurgence of the virus, all eyes were on US tech shares once more after a sell-off lasting multiple days. Yesterday they bounced back, recovering some ground; Tesla (TSLA) and Nvidia (NVDA) led the way, with gains of 10.9% and 6.7% respectively. Prior to the rebound, Tesla had lost more than a third of its value in a little over a week, while Nvidia had fallen 17% over three trading sessions. Apple and Microsoft joined in the rebound, with both adding around 4%. The gains helped the tech-heavy Nasdaq Composite rebound almost 3% yesterday, giving it year-to-date gains of 24.2%, although it remains down 7.6% over the past five days. According to Marketwatch, the index has posted 42 record closes so far in 2020.

The snap back in the US helped lift Asian markets overnight, with Japan’s Nikkei up 0.9% and Hong Kong’s Hang Seng 0.2% firmer.

In corporate news, French luxury goods giant LVMH said that it is backing out of a $16.2bn deal to take over American-listed jeweler Tiffany & Co. LVMH said that the deal was being dragged into trade disputes between France and the Trump administration, and had received a letter from the French foreign ministry asking it to delay the acquisition. Tiffany has in turn sued LVMH in an attempt to force the deal under the agreed terms.

US job openings increased

All three major US stock indices jumped yesterday, with the Nasdaq Composite enjoying the best day after falling the hardest on Tuesday. In earnings news, Slack stock plunged double digits after delivering revenue growth in line with its rate over the past two quarters, rather than the huge pandemic-induced growth other virtual communication tools such as Zoom have enjoyed. The firm also failed to see a year-over-year change in how often it is winning business versus Microsoft’s Teams product, CFO Allen Shim said on the company’s earnings call.

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