Rotation hits tech again, Bitcoin struggles to hold $87K
The rotation out of tech continues to pressure the Nasdaq, while risk appetite remains muted ahead of a busy schedule for the week, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
Stock rally fades as US markets open
The morning’s positivity has drained away as Friday’s selling carries over into the Monday session in the US. At this point, the temptation for many investors to book profits after such a strong recovery since April must be overwhelming, especially with plenty of macro events on the calendar for the week. That said, we are still about 36 hours from the traditional pre-Christmas liftoff for stocks, so it might not be entirely wise to check out too soon.
Crypto weakness a worrying sign
It is a similar story in crypto currencies, as the buyers fail in their attempts to reverse the losses seen in the second half of last week. While there is still some bullish flows into the space, it seems that there is still too much leverage waiting for an exit, which this morning’s modest bounce seems to have provided. Tech stocks are suffering as asset rotation goes on in equities, and crypto currencies seem to be similarly afflicted.
Author
Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.
