Market Roundup

On Monday European markets, opened in the red following yesterday's first round of French parliamentary election where President Emmanuel Macron's list LREM won 32.32% of the vote. A mirror image was seen on Wall Street, with technology companies leading the losses extending the sector’s negative performance from Friday’ session. However, in mid-session, shares eased losses, and the NASDAQ pared most of the daily prop, but the slump in technology equities still weighed on stock indexes in Europe.

Furthermore, global markets are eyeing any political developments in the United Kingdom and waiting for the Federal Reserve’s monetary decision later on this week. The formation of the U.K. government was postponed so that a government new program can be written on “goat skin parchment”.

On the currency side, the British Pound was down, underpinning valuations of companies listed in London that are more internationally oriented.

Technology

Apple shares were down from the second consecutive day due to the mounting concerns over unsustainable high stock prices. Downgraded price targets to neutral from buy, made the stock price slip. It is believed that “the enthusiasm around the upcoming product cycle is fully captured at current levels”. Markets are already expecting strong iPhone 8 sales, which will limit gains on Apple Shares. Although Apple maintains a very strong market shares which are seen on the increment, share gains will be more moderate as the market becomes more saturated.

This news on Apple had a ripple effect on other companies, including the Rival Samsung and other big chipmakers like STMicro and Dialog. From time to time, Valuations of the technology sector tend to go inelastic and thus a correction is needed, with hopes to distribute the outflows in other sectors.

Oil

Oil was in the green area on signs of inventory declines in the United States and reports that Saudi Arabia will limit the supply of crude to some Asian buyers in July and deepen cuts to the United States. The market grew more optimistic the OPEC output deal will prove effective, battling the existing crude market oversupply that has been prevailing for a couple of years.

Originally, investors were skeptical the new nine-month extension will be sufficient to overcome the inflated market. However, traders seem to have reconsidered their stance towards more optimism that this will eventually have a positive outcome.