Equity markets are set for another down day, the tech sector has lost its mojo. Easy jet produced another smashing number but the stock may trade down. Cryptocurrencies under regulatory pressure.
U.S and European markets are poised to decline on Tuesday after weaknesses have been shown in some of the biggest technology companies. The tech wreck is on. The heavy hitters of the technology sectors, FANG stocks got hammered yesterday and most of them entered in a bear market territory. The S&P 500 is down nearly -8% from it’s peak. Companies like Nvidia stock is down more than 50% from their peak taking the title of the worst stock out of the tech sector.
One can always blame the current sell due to the ongoing trade war tensions between the U.S and China. But the fact is that investors need to re-adjust their gauges and expect small profits. The time for the low-interest environment and the element of quantitative easing program providing an extra push for the stock markets is over now. Now, it is more about sinking the reality, and realising that most of the factors that could have squeezed out any potential from the stock markets are limited.
As for the currency market, sterling is still vulnerable as Theresa May is battling against all obstacles while keeping hold of her position. It is more likely that Pound may remain volatile in the midst of this chaos.
The crypto king is being hit hard and it is under tremendous selling pressure. Bitcoin broke the 5000-mark yesterday for the first time, breaking another psychological level. The break of $6000 was bad as it is and now a violation of the 5000-mark is further evidence that bulls are not supporting the price. The next biggest support level is at $4,000. One can only pray that the price doesn’t violate this critical level because a break of this would open the floor towards the 3,000 level.
Fundamentally speaking, the current sell-off is once again triggered due to the regulatory pressure. The SEC reminded the crypto world that it has the final say over anything which smells like security. The department issued civil penalties against two cryptocurrency companies because they failed to register initial coin offerings as securities.
Easy Jet topped street expectations and produced full-year revenue of £5.90 billion ahead of estimates of £5.85 billion. The full-year dividend per share came in at 58.6p, this was also ahead of the estimates of 59.9p. What is more encouraging for Easy Jet is that it has improved it’s revenue per share to GBP 61.94. The firm still needs to improve it’s full-year cost per seat structure, currently, the cost per seat excluding fuel at constant currency is +4.8%. Having said this, the full year capacity has improved and it is sitting at 9.8%.
The fact is that the competition is extremely tough and the company’s competitor; Ryanair is leaving no stone unturned to sustain it’s No.1 place for being the low-cost airline. The challenge for these low-cost airlines is to stay away from the scenarios of strikes as they don’t only cause chaos for the passengers but they also leave a dent on the headline number. One area of interest for Easy Jet investors remains the acquisition of the troubled Italian airline, Alitalia.
