Meta's forecast deepens Nasdaq into correction territory


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The Nasdaq Composite dropped deeper into correction territory on Thursday as Meta became the latest tech company to offer a forecast that didn’t quite live up to investors’ expectations.

The tech-heavy index lost 1.76 per cent, dropping below its 200-day moving average for the first time since March. The S&P 500 dipped 1.18 per cent while the Dow Jones Industrial Average slipped 252 points, or 0.76 per cent. With Thursday’s decline, the S&P 500 came close to a correction from its July intraday high.

Following a 2.4 per cent decline on Wednesday, the Nasdaq Composite is now officially in correction territory, down more than 10 per cent from its high close for the year in July.

Facebook-parent Meta beat on top and bottom lines in the third quarter, but the company noted that it was seeing some advertising softness so far this quarter. Investors also worried about cost control with the company’s Reality Labs division, which shed $3.7 billion throughout the quarter. Meta shares slid 3.7 per cent.

The moves follow a brutal trading session Wednesday, which was partly driven by a 9.5 per cent decline in Google-parent Alphabet. Alphabet’s Class-A shares suffered their worst day since March 2020 on Wednesday after the company reported revenue in its Google cloud unit that came in below analyst estimates.

The Nasdaq on Wednesday recorded its worst day since Feb. 21. The correction since the summer is being driven by a surge in bond yields with the 10-year Treasury yield at one point this month crossing 5 per cent. The 10-year yield slipped 10 basis points to 4.84 per cent Thursday, but that failed to stem the selling.

The market didn’t get any help from the third-quarter gross domestic product report, which came in much stronger than expected. U.S. GDP grew at a 4.9 per cent annualised clip from July through September, while economists polled by Dow Jones forecast 4.7 per cent.

Major earnings are also on the horizon, with Amazon scheduled to post results after the close.

In commodity-related news, Stellantis plans to invest €1.5 billion to acquire a 20 per cent stake in Chinese electric vehicle start-up Leapmotor, aiming to expand its presence in China's growing electric vehicle market and establish a joint venture for selling Leapmotor's electric vehicles globally, capitalising on China's international expansion efforts.

Turning to sectors, Real Estate was the best performer, whilst Communication Services was the worst.
 
Futures

The SPI futures are pointing to a 3 points fall.

Currency

One Australian dollar at 7:35 AM was buying 63.23 US cents.

Commodities

Gold added 0.03 per cent. Silver fell 0.38 per cent. Copper added 0.10 per cent. Oil fell 2.06 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.81 per cent, Frankfurt lost 1.08 per cent, and Paris closed 0.38 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 2.14 per cent, Hong Kong’s Hang Seng fell 0.24 per cent while China’s Shanghai Composite closed 0.48 per cent higher.

The Australian share market closed 0.61 per cent lower at 6,812.

Dividends payable

360 Capital REIT (ASX:TOT)
Calima Energy Ltd (ASX:CE1)
Cedar Woods Properties Ltd (ASX:CWP)
Centuria Industrial REIT (ASX:CIP)
Centuria Office REIT (ASX:COF)
CI Resources Ltd (ASX:CII)
Gowing Brothers Ltd (ASX:GOW)
Newcrest Mining Ltd (ASX:NCM)
RAM Essential Services Property Fund (ASX:REP)
Turners Automotive Group Ltd (ASX:TRA)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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