21.09.202011:59 Forex Analysis & Reviews: Stocks US and Asia continue to trade in red zone

The major stock indexes in the US stock exchanges plummeted on Friday which caused negative dynamics for the third week in a row. This period of reduction is quite long for the US market, such a situation has not been observed for almost a year.

A massive decline reflected in the stock markets beginning Thursday last week against the background of the fall in the value of securities of companies in the US technology sector. Moreover, the indicators sank quite seriously: the DowJones by 0.47%, the S&P 500 by 0.84%, and the Nasdaq by 1.27%. This is not the first time that indexes suffer from tech sector quotes, this has happened several times over the past month. This instability, of course, forces market participants to work quite restrained.

At the moment, the main attention of investors is focused on the situation with the negotiation process regarding a new portion of supportive measures for the US economy. On the last working day last week, some speakers of the House of Representatives began to voice out the need for additional, special incentives for restaurant companies and air carriers, since these sectors of the economy particularly suffered badly during the coronavirus pandemic and continue to experience difficulties against the background of a far from complete recovery in market demand and restrictive measures that are being re-introduced due to fears of the second wave of the pandemic. In May of this year, a proposal was put forward for a package of incentives for this category in the amount of $3.4 trillion, but then it was not ratified, and now this amount seems insufficient to the authorities since the losses of companies have worsened.

Another unpleasant news for the market was the ban on the full provision of services for the distribution and maintenance of mobile applications such as WeChat and TikTok in the United States of America. In addition, it will also be impossible to update previously installed programs through online stores with applications. These greatly disappointed investors, although they, of course, suspected something similar, judging by the statements and policies of the US President Donald Trump.

New statistics on US economic growth also leave much to be desired. The level of the current account deficit of the country's balance of payments for the second quarter of this year jumped rapidly to $170.5 billion, while the previous figure stood at $111.5 billion. According to preliminary data, growth was inevitable, but its estimate turned out to be much more modest than real figures with an expected increase of no more than $157.9 billion.

At the same time, the level of the consumer confidence index in the USA increased and reached 78.9 points. Note that the previous level is around 74.1 points. Thus, the new value was the highest in more than six months. At the same time, experts expected growth to no more than 75 points.

The Dow Jones Industrial Average index was down 0.88% or 244.56 points at the end of Friday's trading, which moved it to 27,657.42 points.

The S&P 500 index lost 1.12% or 37.54 points. Its current level stopped at 3319.47 points.

The Nasdaq Composite index sank 1.07% or 116.99 points, which forced it to retreat to the level of 10793.28 points.

All the same, the Asian stock exchanges also traded in a negative zone Monday morning. The major stock indexes playback the fall in the US market, which also makes them move down.

In addition, market participants continue to closely monitor the increasing number of new coronavirus cases globally. Serious pressure in this regard is exerted by some countries, where a large number of new cases have begun to be recorded again. The British Prime Minister noted that the UK, by all indications, is now facing a second wave of COVID-19. Of course, investors do not expect anything good from such news. The economy has not yet coped with the consequences of the first wave, and the second can be fatal if measures are not taken in time.

Trading platforms in Japan are closed today due to the holiday.

China's Shanghai Composite index dropped 0.45%. The Hong Kong HangSeng index supported the negative trend and sank more significantly by 1.21%. The indexes were pressured by the decision of the People's Bank of China to keep the base annual interest rate at 3.85%. Also, the rate on five-year loans remained unchanged which continues to be in the range of 4.65%.

South Korea's Kospi Index reflected a 0.71% contraction.

The Australian S & P / ASX 200 index, on the other hand, was the only one with positive dynamics which rose 0.67%.