It's another tough day on the S&P / ASX200 (ASX: XJO) after Wall Street indices plunged 3% overnight on the back of multiple concerns over Breixt, the US China trade dispute and a flattening yield curve. The local market is down 1.% this morning after giving up 1% yesterday so let's take a look at some of today's worst performers.
The Wisetech Global Ltd (ASX: WTC) share price is down 2.6% to $18.50 today as tech stocks sink across the board. Tech shares are also vulnerable to a changing macro-environment as if benchmark US interest rates rise analysts will start to use higher discount rates to calculate the net present value of shares. Shares with the most growth priced into them are the most vulnerable to downward revisions of valuation as assessments of longer term risk free rates rise.
The Macquarie Group Ltd (ASX: MQG) share price is down 3% to $113 after famous investment banks on Wall Street like Goldman Sachs and JP Morgan lost 3.8% and 4.4% overnight. These kind of investment banks are losing ground on concerns about the flattening of the US yield curve – that represents the difference between short and long term borrowing rates – with long term rates now lower than some short term rates. This is considered an unhealthy sign for the economy and banks as it suggests bond markets are worried about the medium term outlook.
The National Australia Bank Ltd (ASX: NAB) share price is down 1.6% to $24 as investors worry about the outlook for bank shares globally due to the flattening yield curve and because Australian banks have plenty of homegrown problems. These include the Royal Commission findings likely to lead to higher costs, the bank levy, upcoming federal election and falling house prices.
The Coca-Cola Amatil Ltd (ASX: CCL) share price is down 2.8% to $8.74 despite the fizzy drinks bottler releasing no news to the market. On November 30 Coca-Cola's CEO warned investors that Australian beverage volumes over the 6-month period to December 31 2018 were tracking below the prior corresponding half. The CEO also warned investors not to expect much improvement in 2019 as the group continues to invest for growth it is struggling to find.
