Stocks slumped overnight against a backdrop of growing international trade tension and a White House dialling up conflict with the FBI. Facebook led the falls with a 6% drop on news of a potential data breach involving political operatives. The selling spread across tech stocks and the broader market. The British Pound strengthened after the announcement of a successfully negotiated Brexit period.
Curiously traditional risk off markets barely responded to the sell-off. Bonds were steady to lower, and the small lift in gold prices is attributable to a weaker US dollar. However in a sign all is not well, Wall Street’s fear index jumped from below 16% to above 19%. Asia Pacific futures are pointing to opening losses of around two thirds of a percent although the release of Japan’s leading index and Australian housing data have the potential to alter the market course.
Overnight falls in copper and iron ore may see additional pressure on the Australia 200 index.
Great Britain and the EU announced that Brexit will occur from March 2019 to December 2020. The longer disengagement is considered a positive as it allows time to deal with spikier issues such as the Irish border. A rising Pound exacerbated share market selling, and the FTSE underperformed other European markets.