El-Erian: ‘Not really surprised’ by tech selloff
Allianz chief economic adviser Mohamed El-Erian on investing in today’s markets, the recent tech stock selloff, U.S. economic recovery and coronavirus stimulus negotiations.
U.S. equity markets were under pressure Tuesday as the bruising selloff in technology shares continued for a third straight session.
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The Nasdaq Composite fell 2.48% as mega-cap tech stocks Alphabet Inc., Apple Inc., Amazon Inc. and Microsoft Corp. all traded lower.
|I:COMP||NASDAQ COMPOSITE INDEX||11010.790469||-302.34||-2.67%|
The Dow Jones Industrial Average, meanwhile, slid 513 points, or 1.82%, while the S&P 500 was weaker by 1.87%.
|I:DJI||DOW JONES AVERAGES||27598.45||-534.86||-1.90%|
Tuesday’s selling comes after both the S&P 500 and the Nasdaq last week snapped their weekly winning streaks at five.
BRUISING STOCK SELLOFF UNDERSCORES MARKET RISK DURING CORONAVIRUS TURBULENCE
Elsewhere, Tesla Inc. shares were sharply lower after the electric-car maker was bypassed for inclusion in the S&P 500 in favor of online craft marketplace Etsy Inc., semiconductor equipment maker Teradyne Inc. and pharmaceutical technology company Catalent Inc.
Tax-preparation company H&R Block Inc., cosmetics manufacturer Coty Inc. and department store Kohl’s Corp. were removed from the index.
Looking at deals, Nikola Corp. and General Motors Co. are teaming up to build the Nikola Badger electric truck. GM will receive an 11% stake, worth $2 billion, for its work in helping build the battery-electric and fuel cell-electric models of the vehicle.
Meanwhile, Warren Buffett’s Berkshire Hathaway Inc. reduced its stake in Wells Fargo & Co. to 3.3%, or 136 million shares, its lowest since 2003, according to a regulatory filing out late Friday.
|GM||GENERAL MOTORS COMPANY||32.02||+2.01||+6.70%|
|BRK.B||BERKSHIRE HATHAWAY INC.||217.13||-1.19||-0.55%|
|WFC||WELLS FARGO & COMPANY||24.03||-0.76||-3.07%|
Peloton Interactive Inc. will roll out a lower-priced treadmill and a premium bike as soon as this week, Bloomberg reported, citing people familiar with the matter. The company will also cut the price of its current bike model.
|KDP||KEURIG DR PEPPER||29.00||-0.53||-1.78%|
Keurig Dr Pepper will transfer its stock listing from the New York Stock Exchange to the Nasdaq Exchange later this month. Shares will continue to trade under the ticker KDP.
Looking at commodities, West Texas Intermediate crude oil plunged $3.06 to $36.71 per barrel, a 2.5-month low, while gold slid $22 to $1,912.30 per ounce.
U.S. Treasurys rallied, pushing the yield on the 10-year note down by 5.4 basis points to 0.669%.
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European markets were trading lower across the board with France’s CAC down 2.28%, Germany’s DAX weaker by 1.78% and Britain’s FTSE off 1.08%.
In Asia, Japan’s Nikkei paced the advance, up 0.8%, while China’s Shanghai Composite and Hong Kong’s Hang Seng added 0.73% and 0.14%, respectively.
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