Dear copiers followers,
The overwhelming dominance of the Titans of American tech has one major advantage: it has fuelled the rise of stock market indices, from the $NSDQ100 to all world stock exchanges.
But it's a double-edged sword.
When one of these stocks stumbles, it drags all the stock markets down with it.
We explain.
The rise in the world's stock market indices has been fuelled by the rise in the Nasdaq, the index of US technology stocks.
And the rise of the Nasdaq has been fuelled by the rise of the Titans of tech, those behemoths some of which have exceeded $3,000 billion in capitalization.
The main driver of the rise was $NVDA (NVIDIA Corporation) the champion of chips used by Artificial Intelligence.
AND WHEN NVIDIA GOES...
...everything goes.
But here's the thing.
Yesterday, Nvidia was not doing well.
It dropped 9.5%.
For your information, a 9.5% drop in Nvidia means $278.9 billion up in smoke, the equivalent of several $FRA40 40 companies disappearing in a few hours.
Bear in mind that this is a record.
Never before has an American company lost so much of its value, in dollar terms, in a single day.
IN CAUSE
A subpoena from the US Department of Justice.
For an antitrust investigation.
For abuse of dominant position.
Nvidia defends itself, but the investigation will last several months, creating a climate of uncertainty.
THE CHAIN REACTION
When Nvidia falls by 9.5%, the Nasdaq drops by 3.26%.
When the Nasdaq falls by 3.26%, the $SPX500 500 falls by 2.12%.
And the $JPN225 by over 4%.
And Europe follows.
An automatic chain reaction.
ANOTHER IMMEDIATE CONSEQUENCE
A rise in the $VIX.SEP24 the volatility index that measures market fear.
With markets switching from "risk on" (foot on the gas pedal) to "risk off" in a matter of minutes.
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