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META DATA ANALYSIS
Selling across the board as ‘Fall’ season hits the markets

Selling across the board as ‘Fall’ season hits the markets

Investor activity seems to have taken a cue from the season this week. Our data are indicating a net sell-off in both equities and fixed income. Click the link to find out more.

Last Updated: ‎‎‎‎‏‏‎ ‎
November 17, 2021

This week’s update is co-authored with Benedict Tham (Data Analyst).

‘Fall’ Season Arrives

Investor activity seems to have taken a cue from the season this week. Our data are indicating a net sell-off in both equities and fixed income. What is prominent is that after a long 21-week streak, we are finally seeing a significant selling of equities. Not surprising that with China’s crackdown on tech, coupled with uncertainty in the US markets, investors are scrambling to unload their assets. See chart below

Every single sector was sold

None of the industries were spared this week, not even non-cyclicals. As we further dissect into the industries participating in this great sell-off, the biggest contributor comes from the technology sector. This comes as no surprise with the Chinese Government’s latest barrage of tech regulations.

Slowdown in major markets

Market prices for two powerhouse economies, China and US, have experienced a decline this week, in tandem with our data. Both markets weighed heavily in the sell-off as the world watches closely on the policies in both countries.

Over in the East, crackdown on the tech sector had been the biggest topic for the past month. The sudden regulations came after months of bullish sentiments on the tech sector in China which had already built up quite a tech bubble. Seeing as how Hong Kong being a proxy for the Chinese market, the Hang Seng Index was inevitably affected as well, having one of its worse week since March 2020.

Things over at the West isn’t looking great either. Mixed economic data, continuous spread of COVID-19 delta variant and potential unwinding of relaxed policies has caused uncertainty amongst investors in the US, further fueling equity disposals. Major market players are expecting a well overdue correction after months of bullish trading

Perceptive Bond Traders

Over the past many weeks, we have been seeing bond sell-off with interest rate remaining relatively at the same levels. Interest rates seem to have started upwards this week, reaching a new high. As we continue to monitor interest rates and the Fed’s tapering decisions, it would appear that the prior bond sell-off were well warranted.

Conclusion (tl;dr)

  • Fall season has started with investors selling across the board
  • Major markets also fell this week
  • US Interest rates have risen and this seems to justify the persistent selling we have been seeing in Fixed Income

Please note that this newsletter is just a data analysis of actual investor behaviour and does not constitute investment advice in any form.

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