(04 September 2020)DAILY MARKET BRIEF 1:Wall Street Plunges to Monthly Low

The US stock market has persisted within the overbought territory for too long, as bulls became too strong and went all in too soon. As a result, equities have crashed on Thursday, dragged down by a slump in tech stocks.

Wall Street’s three benchmark indexes saw the deepest single-day drops since June. Meanwhile, mixed economic data in the US stressed worries about a long recovery.

Dow Jones fell 2.78%, the S&P 500 dropped 3.46%, while the Nasdaq Composite crashed almost 5%.

The share price of Apple tumbled 8% shortly after its stock split took effect Monday. Elsewhere, Microsoft, Facebook, Amazon, and Google’s Alphabet were also flashing red. Sentiment on Alphabet has worsened even more due to reports that the US Justice Department intends to bring a lawsuit against Google by the end of September.

Energy stocks were also bearish, as oil prices were sluggish amid ongoing worries over the robustness of crude demand.

Volatility surged, suggesting that investors are making decisions on emotions. The CBOE Volatility Index, dubbed as the fear index, jumped 25% to the highest in two months.
All in all, the US stock market will definitely end the week in the negative territory despite rallying in the first days, as the three indexes updated the monthly low.

In the US, the ISM non-manufacturing index fell to 56.9 in August from 58.1 in July, missing analysts’ expectations for a reading of 57. On the positive side, initial jobless claims rose less than expected, suggesting a stabilizing situation in the labor market. Still, the nonfarm payrolls report due later today will provide a better picture.

Asian stocks are overwhelmed by the Wall Street selloff, having no choice than to follow the general bearishness.