Yesterday was a negative day throughout the market as American policymakers signalled that the Fed is still on track to taper asset purchases. There would more than likely be clarity during this month’s FOMC as to how and when tapering would be set to be implemented. In addition to the tapering expectations Morgan Stanley cut US stocks to Underweight as high valuations, all-time highs and the Delta variant all are some bearish warnings.
The Nasdaq, S&P and Dow Jones declined sharply at the back of the announcement, as investors are gradually moving to a risk-off position.
The precious metals didn’t take the tapering expectation very well either as Gold and Silver slumped lower making daily lows of $1782 and $23.90 respectively.
- Nikola (NKLA) was down 7.18% as automobile inventory was down 58k units for August
- XPeng (XPEV) was down 6.01% as Tesla dominated the EV sales in China
- Plug Power (PLUG) was down 5.78% for the day
- Palantir (PLTR) was down 4.20% for the day
Stocks to watch:
Delta Air Lines (DAL)
Despite recent positive earnings and revenue, the big focus will be the Delta variant that has pushed up infections to near peak levels causing concerns with regards to how it will impact air travel despite the high vaccination rates in the US.
The airline industry also is set to target 3 billion gallons of sustainable aviation fuel by 2030 putting doubts in place of how costs will impact the airline industry. The initiative was put in place by the Biden administration with a strategy to have a zero-carbon aviation sector by 2050.
Technically the chart is setting up for a short as the price failed to break above the 200 daily moving average, price is currently trading in a range and should have at least more downside to $37.50, but with a longer-term target of $34 in mind.