Market excitement over vaccine fades

US equities fall, Asia follows suit

Asian equities are lower this morning, following the retreat of Wall Street, which wilted under a viral load overnight. The S&P 500 fell 1.0%, the Nasdaq fell 0.65%, and the Dow Jones retreated 1.22%. With the rotation trade running out of momentum into the week’s end, the Nikkei 225 has fallen 1.0%, and the Kospi is down 0.30%.

Mainland China continues to suffer a China-tech hangover, with the Shanghai Composite and CSI 300 lower by 1.10%. Hong Kong has fallen 0.65%.

Taiwan is holding unchanged, but Singapore is 0.75% lower with Malaysia down 0.85%. Manila is down 1.20%, and Jakarta is 0.90% lower. Australia has posted more modest losses, the All Ordinaries falling 0.40%, and the ASX 200 down 0.50%.

With a lack of tier-1 data to change the equation, investors are keeping a worried eye on Covid-19 numbers. The realities of the pandemic’s second wave across Europe and the US will continue weighing on sentiment into the end of the week.

Readers should keep an eye on the evolution of the big tech restrictions and regulations being imposed by the China government on its market heavyweights. Fresh from teaching Jack Ma, who the big boss in China really is, (not Jack Ma), one proposal caught my eye. Cross subsidising loss-leading business lines with other profitable ones. Scorched-earth market entry strategies squeezing out new and even incumbent entrants. A personal bugbear of mine with big tech this decade.

I would say China and US politicians agree on this point and quite a number of other proposals in the China proposals. Even Republican’s and Democrat’s agree on big tech and regulation. The only thing they agree on from what I can tell. If China and the US, and Republicans and the Democrats, all agree on something, US big tech should be looking over its shoulder in 2021.

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